I Was Wrong About Altria, There Is Upside After All (Rating Upgrade)
Summary
- I underestimated Altria’s pricing power and margin expansion, which have effectively offset declining cigarette volumes and supported strong EPS growth.
- Altria’s transition to smoke-free products is slower than peers, but ON! nicotine pouches are gaining traction and boosting profitability despite NJOY setbacks.
- Shares trade at a 20% discount to historical averages, offering a 6.8% yield and potential 12-13% annual total returns for income-focused investors.
- Altria remains a stable, high-yield pick for dividend and total return investors, with manageable risks and a clear path to moderate EPS and dividend growth.
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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