Altria Increases Dividend Despite Declining Cigarette Sales
Altria (MO) has raised its quarterly dividend to $1.11 per share, marking the company's 60th increase in 56 years and offering a yield of approximately 6.16%. This move comes despite an industry-wide decline in cigarette sales, with U.S. shipment volumes falling by 10% for the year. The firm attributes its ability to maintain high payouts to strong pricing power; Marlboro prices increased by about 7%, contributing to smokeable adjusted operating company income margins of 65.1%. Altria also doubled its share repurchase authorization, returning $8 billion to shareholders through dividends and buybacks in a single fiscal year. However, the company's transition toward smoke-free products has faced challenges. On! nicotine pouches lost market share despite volume growth, while NJOY e-vapor recorded a $1.3 billion impairment charge due to an ITC exclusion order. CEO Billy Gifford highlighted strong cash generation and returns to shareholders but acknowledged macroeconomic pressures affecting consumer behavior. Altria's strategy of maintaining high dividends amid declining cigarette volumes has raised concerns among analysts, who question the sustainability of its yield given ongoing market shifts toward alternative nicotine products.
Tickers: $MO
Topics: cigarette sales decline dividends operating margins pricing power