Altria: A Solid Dividend Play

Summary

• Altria had mixed Q1'25 earnings, driven by challenges in both the traditional tobacco market and its new alternative products category.
• The U.S. International Trade Commission's importation ban on NJOY ACE vape products created short-term uncertainty, but Altria plans to appeal the decision.
• The import ban forced the company to record an impairment charge in the amount of $873M.
• Altria raised its FY 2025 adjusted EPS outlook to $5.30-$5.45, implying a 2%-5% growth. The EPS range implies a 77% dividend payout ratio.
• MO remains an attractive capital return play for dividend investors despite shares trading above my fair value estimate.

Thomas Barwick/DigitalVision via Getty Images

Altria (NYSE:MO) reported mixed results for its first fiscal quarter of FY 2025 which is due to the company facing obstacles in its business, including negative growth in its core tobacco segment and new challenges in its alternative products category. As

Analyst’s Disclosure: I/we have a beneficial long position in the shares of MO, BTI either through stock ownership, options, or other derivatives. 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.