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Altria Vs. Philip Morris: Which Is A Better Buy

Jun. 24, 2022 6:34 AM ETAltria Group, Inc. (MO), PM28 Comments
William Sabin profile picture
William Sabin


  • Altria shares fell hard this week after reports of an FDA ban on Juul products.
  • Altria and Philip Morris International have typically been solid defensive plays in recessions.
  • The U.S. tobacco market is expected to grow at a 3.4% CAGR to reach $102.70 billion by 2030.
  • MO and PM pay high, generally sustainable dividends creating high yields and might be considered in a well-rounded portfolio.
  • Both stocks have their advantages - read for how to trade them with less capital requirements and commitments.

Philip Morris Changes Name To Altria

Mario Tama/Getty Images News


Altria Group Inc. (NYSE:MO) shares fell 9.2% on June 23 after the Wall Street Journal reported that the Food and Drug Administration (FDA) has banned all of Juul Labs' vape products from the U.S. market in a

This article was written by

William Sabin profile picture
Invest Smarter.  Build wealth.  Live free.William Sabin is the Trade Small, Trade Often Officer. William is a CPA and CMA with experience in public accounting as well as finance, manufacturing and oil & gas industries. He has a penchant for investing – his grandfather taught him about investing and trading stock options at 11 years old. With over 35 years of investing experience, he is an avid trader, value seeker, and is focused on financial freedom to open true freedom in life. The reason and the "why" I write articles on Seeking Alpha are to help others see through the array of articles and opinions of investment and trade ideas. As a financial coach, my objectives are to help you: 1) invest wiser, 2) build long-term wealth, 3) get financially and mentally ready for retirement, and 4) to help you live free. As a Seeking Alpha contributor, William generally writes on retirement strategies including stocks that appear to be undervalued using fundamental analysis and charting to time entry and exit points.  William has written for several publications including Seeking Alpha, financial magazines as well as for the U.S. Congress on international tax reform.Please visit focusonfreedoms.com for further interests, strategies, expertise, and experiences to help you gain freedom in life. Follow William on Twitter: @FocusOnFreedoms www.focusonfreedoms.comwww.optionstradingpilot.com

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (28)

74.3$ is the price I'd be willing to buy PM
Murad Shawar profile picture
@Dagoru Same
Thank you for your article William!

Correct data updated:
06/15/2022 -3P 44 Exp 07/01 0.60 2.40 28.9% annualized premium
06/27/2022 -2P 41.50 Exp 07/15 0.48 0.96 22.0% annualized premium
The 44 strike puts may be assigned at an average cost of $43.40, but we're fine with that, either way a win.
The 41.50 strike puts are unlikely to be assigned driving the average cost down to $42.92, if the 44 puts assigned. Would be very happy owning MO at that price and adding through further short puts and covered calls or for providing income in the 20-30% range annualized. Conservative options writing is a powerful way to supercharge equity investing and we use it often to our benefit.
MO or PM? What's the difference? They both make poison sticks that are killing people. How do you sleep at night profiting from that?
@Cliffhanger55 extremely well, thank you
Altria owns 10% of AB InBev worth over $10 Billion. The AB annual dividend has dwindled from around $3-$4 per share between 2014-2017, to around .40-.60 cents in 2020-2021. AB-InBev has been paying down high debt loads, which is one of their main issues.
The AB investment hold good potential to increase in value over the next several years. They are reducing their debt and they are earning $5-$6 billion a year. This will be beneficial to Altria in the long term.
dlevine007 profile picture
I could see how MO and PM merge again and we get both - I (luckily) sold a bunch of MO in the low 50s and was able to buy a bunch back around 42. I’ve owned and watched MO on and off for decades; historically, bad litigation news creates a great time to buy. I don’t think they will cut the dividend; I think MO will merge with PM or the price of MO will go back to where it was.
bobsar profile picture
@dlevine007 Never. The whole point of PM is to be outside US regulatory reach.
hugh74jones profile picture
Thank you for giving folks out there a little more info and education on "naked puts", one of my primary activities, on a daily basis, and with 26 consecutive months of net profits, thru recent June 17th expiration. I do have an income based portfolio, with MO as my 2nd largest holding ----I do not own PM though, as have considered it overpriced, with dividend yield less than MO.
BuddhaLove profile picture
So what about that book value on $MO any concerns anyone? If yes why and if no why?
bk25 profile picture
BTI is still blocking IQOS in the US .....right?
50locations profile picture
I am an income investor. Have owned MO since 2019. Great dividends and Great stock to sell CC on. Made a fortune selling leaps when she hit $57 and bought them all back Thursday for only .10 a share.
BuddhaLove profile picture
@50locations how does that work and how does one do that? got my share of shares and would love to maximize some income with them Im just not knowledgable on CC or leaps
You state twice that MO’s PE is 25. You may want to recheck that. I believe it is under 10.
@nogoodnamesavailable PE is on trailing earnings, which includes big write down on BUD investment in 2021. The 9 PE is based on "adjusted operating earnings," which is a non-GAAP measurement.
PLUS... are you favoring MO just because of "puts" ?
bobsar profile picture
MO is $43. How do you get 7200 for 100 shares?
@bobsar big commission- ask your broker for a better discount!
Inflation? The inelasticity of addiction is amazing
Like them both.
Own them both.
Will keep them both.
7400 should be 4700 (typo ? )
Why not consider BTI?????
hugh74jones profile picture
@villanema i agree, the PM vs MO comparison have come up before, and BTI has been left out like a "neglected child" ! However, note BTI as with T, both in my income portfolio, have had the best tract records in 2022.
Librarian Capital profile picture
"Marketing increased from $7.62 billion in 2019 to $7.84 billion in 2020, with the bulk of spending on price discounts paid to cigarette retailers and wholesalers."

This is false. Philip Morris reports net revenue figures that are net of trade discounts. Marketing expenses are just marketing activities like advertising and customer engagement.

There are other factual mistakes in the article, for example in Altria's market share by volume (49%, not 42%) and the size of its stake in Juul (35%, not "one third"). I am not listing them all.
@Librarian Capital There have been a plethora of articles about tobacco and MO recently and it's become almost comical the number of errors in these articles. Buyer beware...or readers beware for that matter.
@Librarian Capital wish I had your view on every article I read. Likely I would not catch this stuff. I wish you had time and resources to publish the "The Real Read" by.... Librarian Capital.
longmoneyvinz profile picture
PM is the better company but MO is the better buy because of higher Div and better valuation.
and the PM russia Ukraine struggle should have been a bigger impact in your analysis. therefor PM has a negativ growth EPS year and MO NOT !
@quaresma7 Agreed !
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