Altria Group, Inc. (NYSE:MO) is included among the 13 Most Profitable Dividend Stocks to Buy Right Now. Altria Group (MO): A High-Yield Favorite Among the Most Profitable Dividend Stocks Altria Group, Inc. (NYSE:MO) st⁠ands a‌s one of th⁠e leadi‍ng names in the tobacco⁠ in⁠dustry, with a po‌rtfo​lio that includ‍es well-known brands such as Marlboro, Bl‌ack & Mild, Copenhagen, and Skoal. T‌he company also belongs to⁠ the elite group of Dividend Kings, bo‌as⁠ting 56 consecutiv⁠e⁠ y‍ears of dividend growth ...

Group 1: Company Overview - Altria Group, Inc. (NYSE:MO) is recognized for its ownership of Marlboro and a diverse portfolio that includes oral tobacco products, cigars, and e-vapor devices, as well as a significant stake in Anheuser-Busch [2] - The company has successfully maintained strong profits despite a long-term decline in cigarette use in the US, leveraging price increases, cost-cutting measures, and operational efficiencies [3] Group 2: Financial Performance - Altria has achieved nearly 60% growth in consolidated free cash flow over the past decade, reaching $8.7 billion in the last twelve months [3] - The company has a robust dividend history, having raised its payouts 60 times over the past 56 years, with a current quarterly dividend of $1.06 per share, resulting in a dividend yield of 6.54% as of October 2 [5] Group 3: Future Outlook - Altria is investing in non-cigarette products, with stable performance in its cigar segment and growth in newer areas like vaping and nicotine pouches, particularly the on! pouch brand, which saw 26.5% volume growth last quarter [4] - The recent partnership with KT&G in South Korea aims to expand its product offerings and explore potential investments in the energy sector, indicating a strategic shift in the company's direction [4]

Company Overview - Philip Morris International Inc. (PM) has a market capitalization of $250.4 billion and operates in over 180 countries, primarily known for its cigarette and smoke-free product brands, including Marlboro, the top-selling international cigarette brand [1] Earnings Expectations - The company is set to announce its fiscal Q3 2025 earnings results on October 21, with analysts predicting an adjusted EPS of $2.11, reflecting a 10.5% increase from $1.91 in the same quarter last year [2] - For fiscal 2025, the expected adjusted EPS is $7.52, which represents a 14.5% increase from $6.57 in fiscal 2024 [3] Stock Performance - Over the past 52 weeks, shares of Philip Morris have increased by 32%, outperforming the S&P 500 Index's rise of 17.6% and the Consumer Staples Select Sector SPDR Fund's decline of 5% [4] - Following the Q2 earnings release on July 22, shares dropped by 8.4%, despite reporting a net revenue of $10.1 billion, which grew by 7.1% year-over-year, and an adjusted EPS of $1.91, surpassing analyst estimates of $1.85 with a year-over-year increase of 20.1% [5] Analyst Ratings - The consensus view among analysts is cautiously optimistic, with a "Moderate Buy" rating overall. Out of 15 analysts, nine recommend "Strong Buy," two suggest "Moderate Buy," and four advise "Hold" [6] - The average analyst price target for Philip Morris is $193.77, indicating a potential upside of 22.7% from current market prices [6]

Core Viewpoint - Altria Group's stock has increased by 25% this year, currently trading near all-time highs, while maintaining a high dividend yield of 6.27% [1][2][11] Dividend Yield and Growth - Altria Group has a strong history of dividend growth, with 60 increases in the last 56 years, making it one of the top dividend stocks historically [4] - The dividend yield has decreased from nearly 8% earlier this year to 6.27%, but it remains significantly higher than the S&P 500 average of just over 1% [4] - Over the past decade, Altria's dividend growth has been approximately 87%, contributing to long-term gains for shareholders [5][10] Sustainable Cash Flows - Despite a decline in cigarette usage in the U.S., Altria has managed to grow earnings through consistent price increases, with operating earnings up 4.4% year over year last quarter [6] - Altria is diversifying its product offerings into electronic vaping and nicotine pouches, which are expected to drive long-term growth and counteract declines in cigarette volumes [7] - The company's dividend per share payout over the last 12 months is $4.24, while free cash flow per share is around $5.15, indicating a sustainable capacity for dividend increases [8] Future Outlook - With ongoing price increases, diversification efforts, and a favorable gap between free cash flow and dividend payouts, Altria is positioned to continue its dividend growth over the next decade [10] - A starting dividend yield of 6.27% could potentially yield over 10% on cost basis for shareholders in 10 years, providing consistent income [10]

Core Insights - Altria Group, Inc. and Philip Morris International Inc. are leading companies in the global tobacco industry, with market capitalizations of approximately $109.5 billion and $255.3 billion respectively [1][2] - Both companies are heavily investing in next-generation products to adapt to declining cigarette volumes and increasing demand for smoke-free alternatives [3] Altria Group, Inc. (MO) - Altria's strong pricing power has allowed it to offset declines in cigarette volumes, with a net price realization of 10% in the smokeable products segment leading to adjusted operating companies income (OCI) growth of 4.2% in Q2 2025 [4] - The oral tobacco segment saw a 10.9% increase in adjusted OCI, with segment margins expanding 310 basis points to 68.7%, driven by the success of the on! nicotine pouch brand [5] - Adjusted earnings per share increased by 8.3% year over year to $1.44, supported by strong adjusted OCI growth and share repurchases, with Marlboro holding a 59.5% share in the premium category [6] - Domestic cigarette volumes fell 10.2% in Q2 2025, indicating ongoing industry declines and competitive pressure from flavored disposable e-vapor products [7] Philip Morris International Inc. (PM) - Philip Morris' smoke-free products accounted for 41% of total net revenues in Q2 2025, reflecting a 15.2% year-over-year increase, with IQOS, ZYN, and VEEV driving this growth [11] - Combustible net revenues advanced 2.1% in the quarter, supported by strong pricing power, while gross profit increased by 5% [12] - The company achieved over $500 million in gross cost savings in the first half of 2025, contributing to meaningful margin expansion [13] - Traditional cigarette volumes fell 1.5% year over year to 155.2 billion units, with management projecting a full-year decline of 2% [14] Financial Performance Comparison - The Zacks Consensus Estimate for Altria's 2025 EPS is $5.39, indicating a year-over-year increase of 5.3%, while Philip Morris' estimate remains at $7.50, suggesting growth of 14.2% [15] - Over the past year, Altria stock gained 27.7%, underperforming Philip Morris, which increased by 36% [16] Investment Outlook - Philip Morris is viewed as the stronger growth story due to its transition to smoke-free products and efficiency initiatives, while Altria offers stability and consistent performance [17]

Core Insights - Altria Group has entered a global memorandum of understanding with KT&G Corporation to collaborate on oral nicotine, wellness products, and efficiency improvements in traditional tobacco operations [1][9] Strategic Partnership - The partnership allows Altria to diversify revenue streams beyond cigarettes while enabling KT&G to leverage Altria's distribution network for global expansion [2] - Altria's subsidiary will acquire an ownership interest in Another Snus Factory Stockholm AB, coinciding with KT&G's acquisition of the same [3] Product Expansion and Market Entry - The collaboration aims to grow global demand for pouch products, including Altria's on! and on! PLUS brands [3] - Through KT&G's Korea Ginseng Corporation, the partners will explore entry into the U.S. energy and wellness market, combining KGC's expertise with Altria's retail presence [4] Operational Efficiency - Altria and KT&G will share best practices to enhance efficiency in cigarette manufacturing and supply chains, which may also support international nicotine product growth [5] Financial Performance - Altria's smokeable products segment achieved a net price realization of 10% in Q2 2025, leading to a 4.2% increase in adjusted operating income and a margin expansion of 290 basis points to 64.5% [6] - Marlboro brand expanded its market share in the premium category to 59.5%, demonstrating effective brand management [7] - The on! nicotine pouch brand saw a 26.5% increase in shipments in Q2, with adjusted operating income rising by 10.9% and margins expanding by 310 basis points to 68.7% [8] Market Challenges - Domestic cigarette shipments decreased by 10.2% in Q2, reflecting industry-wide declines and increased competition from flavored disposable e-vapor products [10]

Core Viewpoint - Altria Group, known for its Marlboro brand, faces an uncertain future despite its history of consistent dividend increases and dominance in the tobacco market [1][2]. Industry Transition - The tobacco industry is shifting from combustible cigarettes to smoke-free products, with Altria's ability to adapt to these trends being crucial for its long-term viability [2][5]. - The U.S. tobacco market remains lucrative, with Altria holding a 41% share of the retail cigarette market and 59.5% of the premium segment [4]. Product Development Challenges - Altria has struggled to establish itself in the next-generation product categories, including electronic vapes and heated tobacco devices, following a failed investment in Juul and a recent patent loss [5][6][7]. - Oral nicotine salt pouches have been Altria's most successful smoke-free product, but it still lags behind competitors like Philip Morris International's Zyn [8]. Financial Performance - In Q2 2025, approximately 83% of Altria's operating income came from smokeable products, indicating that smoke-free products are not yet a significant revenue source [9]. - The legacy smokeable segment remains profitable, allowing Altria to slowly increase free cash flow per share through price hikes and stock repurchases [10]. Dividend and Growth Outlook - Altria recently raised its dividend by 3.9%, offering a starting yield of 6.5%, with analysts projecting an average earnings growth of 3.4% annually over the next three to five years [11][12]. - The company is expected to maintain steady dividend growth for at least another five years, provided it can improve its performance in next-generation products [12]. Distribution Network Advantage - Altria's extensive distribution network, built through its Marlboro brand, positions it to potentially regain market share in new product categories if it executes effectively [13]. Investment Considerations - Altria is considered a strong high-yield dividend stock, appealing to investors seeking steady income, though it may not be suitable for those looking for high growth and capital gains [14][15]. - The company must enhance its product rollout and market presence in the transitioning nicotine industry to secure its long-term position [16].

Dividend Increase - Philip Morris International Inc. has raised its quarterly dividend by 8.9% to $1.47 per share, with the annualized dividend now totaling $5.88 per share, marking a total increase of 219.6% since 2008 [1][8] - The next dividend payment is scheduled for October 20, 2025, to shareholders on record as of October 3, 2025 [1] Growth Strategy - The company's long-term growth strategy is focused on its smoke-free transformation, with smoke-free products contributing 41% of total net revenues in Q2 2025, growing 15.2% year over year [2] - Key products driving this growth include IQOS, ZYN, and VEEV, positioning the company for sustainable growth and long-term value creation [2] Traditional Cigarette Business - Despite volume declines, the traditional cigarette business remains resilient, with combustible net revenues growing 2.1% in Q2, driven by price increases [3] - Marlboro achieved its highest quarterly market share since the 2008 spin-off, reinforcing the brand's strength and pricing leadership [3] Cost Efficiency Initiatives - The company achieved over $500 million in gross cost savings in the first half of the year through optimization initiatives, aiming for $2 billion in gross cost efficiencies between 2024 and 2026 [4] - By mid-2025, the company has already realized more than $1.2 billion in cost efficiencies, contributing to margin expansion [4] Earnings Outlook - Management has lifted its full-year adjusted earnings per share guidance to a range of $7.43-$7.56, indicating a growth of 13-15% [5] - This outlook reflects management's confidence in sustaining double-digit earnings growth despite ongoing regulatory and currency challenges [5] Stock Performance - Over the past six months, Philip Morris stock has risen 7.6%, compared to the industry's growth of 15.7% [10]

Group 1 - Philip Morris International Inc. (NYSE:PM) is recognized as one of the 15 best performing dividend stocks in 2025, with a stock surge of nearly 36% since the beginning of the year [1][3] - The company has successfully transitioned to next-generation, smoke-free products, such as IQOS heat-not-burn tobacco sticks and ZYN oral nicotine pouches, contributing to its stock performance [3] - Philip Morris has maintained a solid dividend policy, rewarding shareholders with growing dividends for the past 15 years, currently offering a quarterly dividend of $1.35 per share and a dividend yield of 3.31% as of September 15 [4] Group 2 - The company was established in 2007 after splitting from Altria, focusing on international markets where cigarette sales have been stronger [2] - In the second quarter, while cigarette sales volume decreased by 1.5%, organic revenue from cigarettes still grew by 2%, indicating resilience in its core business [2]

Core Insights - Altria Group, Inc. (NYSE:MO) is recognized as one of the best performing dividend stocks in 2025, primarily due to its high and steadily growing dividend yield [1][2]. Company Overview - Altria is one of the largest tobacco companies globally, owning well-known brands such as Marlboro, Black & Mild, Parliament, Copenhagen, and Skoal [2][3]. - The company has a strategic focus on maximizing cash flow from the declining cigarette market, compensating for falling sales volumes by regularly increasing cigarette prices [3]. Dividend Performance - On August 21, Altria announced a 3.9% increase in its quarterly dividend, marking the 60th dividend increase in the past 56 years [4]. - The current quarterly dividend stands at $1.06 per share, with a dividend yield of 6.49% as of September 15 [4].