Core Viewpoint - Altria Group Inc offers a high dividend yield of 6.36%, raising concerns about the sustainability of this yield given its financial metrics [2][7]. Dividend and Earnings - The company pays a quarterly dividend of $1.06 per share, totaling $7.20 annually, and has consistently raised its dividend for over two decades [3]. - Altria's earnings payout ratio exceeds 100%, with reported earnings of $4.06 per share against dividend payments of $4.16 per share, indicating potential risks for income investors [4][7]. Cash Flow Analysis - In 2025, Altria generated $9.07 billion in free cash flow, covering $6.96 billion in dividends, resulting in a free cash flow payout ratio of approximately 77% [5][7]. - The coverage ratio over the past five years has ranged from 1.22x to 1.34x, suggesting a comfortable position above critical thresholds [5]. Balance Sheet Concerns - Altria has a total debt of $25.7 billion and negative shareholder equity of -$3.5 billion, a situation that has persisted for five consecutive years [10]. - The debt-to-assets ratio is 73.4%, and current liabilities exceed current assets, raising concerns about financial stability [10]. Management Insights - CEO Billy Gifford highlighted the commitment to significant cash returns to shareholders and projected adjusted EPS for 2026 to be between $5.56 and $5.72, indicating growth of 2.5% to 5.5% [13]. - The company has expanded its share buyback program to $2 billion, which, while reassuring, does not mitigate the existing leverage and earnings pressure [13].