Cigarette smoking has been declining for decades, but it won't stop altria group (NYSE:MO) It starts with paying out large dividends to satisfied shareholders. The company behind the leading Marlboro brand has raised its quarterly dividend 58 times over the past 54 years.
In 2023, Altria distributed approximately $6.8 billion worth of dividends. This stock provides investors with a quarterly dividend of $0.98 per share. At its most recent closing price of about $42 per share, investors would receive an ultra-high yield of 9.3% even if the company doesn't increase its dividend.
Altria Group typically announces quarterly dividend increases in August. It's still too early to know exactly how much dividends the company will distribute in 2024, but it's safe to say that we can expect its 54-year sales streak to continue.
How can Altria continue to increase its dividend?
Although people don't light up cigarettes as often as they used to, nicotine consumption in the United States is still growing at about the same pace as the population. Altria's initial attempts to transition smokers to e-vapor devices faced a major hurdle when the U.S. Food and Drug Administration (FDA) banned flavored e-cigarettes in 2020.
Despite a 9.9% decline in cigarette sales, the company reported a decline in total revenue excluding excise taxes of just 0.9% last year. Cost control and stock buybacks helped Altria increase its adjusted earnings by 2.3% in 2023.
Altria's stock price is under pressure as the company loses market share to Elf Bars and other illegal e-vapor products. The competitive threat has not gone away, but it may begin to subside. The strengthened flavor ban and the recently launched new e-cigarette brand 'NJOY' will likely help total sales return to growth.
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Cory Renauer has no position in any stocks mentioned. The Motley Fool has no position in any stocks mentioned. The Motley Fool has a disclosure policy.
How much is Altria Group's dividend this year? Originally published by The Motley Fool
