Altria High Dividend Yield

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Altria High Dividend Yield

Altria'S High Dividend Yield Is Sustainable?

The forward dividend yield of Altria Group is 6.6%, which is quite high. Now, many are worried whether such a high dividend yield is really sustainable or not.

Altria Group has been increasing its dividend payments every year since 2009. However, the sales have been declining ever since, which is making it tough to sustain the dividend payments.

Altria'S Eps Growth Remains Solid

During Q2, the adjusted EPS growth and even the earnings guidance of Altria Group were very solid. However, the Altria Group continues to face headwinds.

The data also shows that the adjusted EPS of Altria Group has reached $1.44 with an 8.3% jump. That was a lot higher than the EPS forecast of $1.39.

The company also introduced new products, which have allowed it to secure more sales. The data shows that the shipment volumes of new products have increased by 26.5%.

The annual dividend rate of Altria Group is currently $4.08. And during the first 6 months, they have generated around $2.9 billion worth of free cash flow and operating cash flow. At the same time, the company has paid around $3.5 billion worth of dividends during the same period.

However, the biggest concern for everyone is that people are now consuming fewer cigarettes. So, that's something which will continue to affect the firm's bottom line in the coming years.

As people grow more health-conscious and move towards other healthier options, things will only get tough for the Altria Group.

According to analyst consensus, the company is valued at a forward price-to-earnings (P/E) ratio of 11.5 for 2025. Compared to its previous division, Philip Morris International, it is significantly less expensive.

So for now, the dividend payments from Altria are sustainable, but it will get tough if the sales continue to drop. To counter this, the company will have to expand into new markets and also launch new products.

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