Altria Group, Inc. (MO): A Bull Case Theory

We came across a bullish thesis on Altria Group, Inc. (MO) on Substack by Serhio MaxDividends. In this article, we will summarize the bulls’ thesis on MO. Altria Group, Inc. (MO)’s share was trading at $60.48 as of May 6^th. MO’s trailing and forward P/E were 10.15 and 11.30 respectively according to Yahoo Finance.

A farmer surveying a field of tobacco plants in the late evening sun.

Altria Group, Inc., a dominant force in the U.S. tobacco industry, has built its reputation on legacy brands like Marlboro cigarettes, Black & Mild cigars, and smokeless tobacco products under Copenhagen and Skoal, while expanding into smoke-free alternatives like NJOY ACE e-cigarettes. With operations concentrated in the U.S. and a broad distribution network through wholesalers and retailers, Altria has maintained a stable, cash-generative business model. A storied history dating back to 1847 under Philip Morris, the company rebranded to Altria in 2003 to reflect a diversified approach, which included spin-offs of Kraft and Philip Morris International in 2006–2008—moves that preserved shareholder value without reducing dividend payouts. Altria boasts 55 consecutive years of dividend payments and growth, currently offering an attractive 6.80% yield. Even the technical dividend reduction in 2009, linked to structural adjustments rather than weakening fundamentals, didn’t break its dividend-growth legacy. Looking forward, Altria is accelerating growth through robust investment in innovation, market expansion, and strategic acquisitions. The company plans to invest $512 million in R&D in 2025, with nine product launches aiming to boost market share by 2.8%. Additional allocations include $250 million for emerging market entry and $125 million for digital transformation. A $1.2 billion acquisition budget underscores its intent to solidify future competitiveness. Financially, Altria is projecting 2025 revenue growth of 4.5%, EPS growth of 5.6%, and a 3.4% rise in operational efficiency. These initiatives, combined with strong brand loyalty, generous capital returns, and a resilient business model, make Altria a compelling income-generating investment with a sustainable growth trajectory. Its commitment to shareholder value, stability, and future-forward strategy signals that the market may be undervaluing its long-term potential, offering a solid opportunity for investors seeking both yield and defensive growth.

Altria Group, Inc. (MO) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held MO at the end of the fourth quarter which was 32 in the previous quarter. While we acknowledge the risk and potential of MO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.