Is Altria Group, Inc. (MO) A Buy?

Altria Group has a strong history of steady dividend payouts as the company has increased its quarterly dividend 40 times over the last 42 years. The only two times the dividend was not increased was in 2007 (when it completed the spin-off of Kraft Foods) and 2008 (when it completed the spin-off of Philip Morris International). Currently, the company offers an impressive dividend yield of 5.10% which I feel is sustainable. It is imperative to understand that Altria is not just a plain tobacco company. It is made up of several subsidiaries like tobacco, cigars, smokeless products and wines; each one providing a different avenue of revenue.

Overall, I believe Altria is in a period of transition and given the company’s strong, leading portfolio of brands, coupled with its tremendous knowledge of the tobacco industry, I am optimistic the company will be able to enter a period of sustainable growth and improving margin in the next couple of years. I rate it a buy.

The article Is This Tobacco Company A Buy? originally appeared on Fool.com and is written by Neha Gupta.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.