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Altria: High Dividends, Strong Dividend Growth

Dividend Growth Investor profile picture
Dividend Growth Investor


  • Altria raised its quarterly dividend by 6.70% to 70 cents/share just last week. This was the second dividend increase over the past year.
  • I believe that the company is solid, and has the ability to continue growing earnings and dividends into the future.
  • I also believe that the company is attractively valued today, and has high dividend yield which is safe.

Altria Group, Inc. (NYSE:MO) manufactures and sells cigarettes, smokeless products, and wine in the United States. The company is well known in dividend growth investor circles, and is a common holding for many of us. Altria delivers dependable dividend growth and high total returns, and has been doing that for decades.

Altria raised its quarterly dividend by 6.70% to 70 cents/share just last week. This was the second dividend increase over the past year, after Altria hiked its distributions by 8.20% to 66 cents/share back in August 2017. Altria is a dividend champion, which has rewarded shareholders with a raise for the past 48 years in a row.

The company's press release really summed it up very well:

Today's dividend increase reflects Altria's intention to return a large amount of cash to shareholders in the form of dividends and is consistent with Altria's dividend payout ratio target of approximately 80% of its adjusted diluted earnings per share. Altria has increased its dividend 52 times in the past 49 years.

The company is hiking the dividends, because its tax rate is going lower. As a result, its earnings per share are increasing faster than expected, which leaves more room for further dividend increases to be shared with long-term shareholders like us.

For some strange reason, Altria was booted from the dividend aristocrats index in 2007, which is why I prefer to focus on the dividend champions list, maintained by David Fish.

The company has managed to almost double dividends per share between 2009 and 2017.

There are a lot of reasons to like Altria. The products are branded and addictive and the market for tobacco products so far is in the hands of a few major players with Altria holding a dominant position. There is some threat of future legislation banning

This article was written by

Dividend Growth Investor profile picture
I have been focusing my attention particularly to companies that regularly increase dividends to their shareholders for over a decade. I have also written about about dividend growth stocks on Seeking Alpha and my website for over a decade. I am mostly a buyer of high quality dividend stocks, with solid competitive advantages. My holding period is forever - for as long as the dividend is at least maintained. I tend to concentrate my efforts on stocks which grow earnings and dividends, which provides outstanding total returns over time. I only focus my attention to stocks with sustainable dividend payments. I am also a firm believer in diversification accross sectors and geographic locations. I am a patient buy and hold investor, who believes that having an investment plan, investing regularly per your plan, staying the course, and keeping investment costs low are the best tools in the arsenal for the individual investor.I share my thoughts on investing in dividend paying stocks that have consistently increased their payments over time and tips on growing my dividend income. I hope that my blog will serve as an inspiration for my readers and that it would change their financial lives for the better.

Analyst’s Disclosure: I am/we are long MO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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