Altria Group (NYSE: MO) has achieved a total return of 17% year-to-date in 2025, significantly outperforming the S&P 500’s 2% return. The company’s stronghold in the tobacco industry, particularly through its Marlboro brand, has provided a substantial dividend yield of 6.8% amidst growing market volatility.
However, Altria faces challenges as cigarette volumes continue to decline, with Marlboro sales dropping 13% year-over-year last quarter. Despite only a 4.1% decline in smokeable net revenue due to price increases, analysts express concern over the sustainability of Altria’s dividend, with current free cash flow at $4.97 per share, outpacing the annual dividend of $4.04 per share.
As Altria seeks to diversify into new nicotine products like NJOY and On!, it remains behind competitors such as Zyn, which reported a quarterly shipment volume of 202 million, significantly surpassing On!’s 39.3 million units. Investors are advised to weigh these factors before considering an investment in Altria Group.
