Is MO a good stock to buy? We came across a bullish thesis on Altria Group, Inc. on Investing Lawyer’s Substack. In this article, we will summarize the bulls’ thesis on MO. Altria Group, Inc.’s share was trading at $72.11 as of May 27th. MO’s trailing and forward P/E were 15.05 and 12.87 respectively according to Yahoo Finance.
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Altria is one of the largest tobacco companies in the United States and is best known for its Marlboro cigarette franchise and smokeless tobacco products. The investment case centers on the company’s ability to generate substantial and consistent cash flow from a large, resilient tobacco market despite long-term declines in smoking rates and increasing social scrutiny surrounding the industry.
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While environmental, social, and governance-focused investors often avoid tobacco stocks because of the health impacts associated with smoking, Altria continues to attract income-oriented investors due to its strong shareholder return profile and decades-long record of rewarding investors.
The company has increased its dividend for 55 consecutive years, demonstrating a commitment to returning capital through varying economic and regulatory environments. According to Seeking Alpha data, Altria currently maintains a payout ratio of 75.42%, a five-year dividend growth rate of 4.04%, and an attractive dividend yield that remains one of the primary reasons investors own the stock. Supporters of the company argue that the market may underestimate the durability of tobacco demand, as millions of consumers continue to use nicotine products despite changing societal attitudes.
The tobacco industry’s enormous scale creates a significant cash-generating opportunity, allowing established players such as Altria to benefit from strong pricing power, brand loyalty, and recurring consumer demand. Even though smoking is no longer viewed as a growth industry, the company’s ability to convert earnings into cash and distribute that cash to shareholders makes it appealing for dividend-focused portfolios. The bullish thesis ultimately rests on the belief that Altria can continue leveraging its dominant market position and reliable cash flows to sustain dividend growth and deliver attractive long-term income returns to investors.
Previously, we covered a bullish thesis on Altria Group, Inc. (MO) by Serhio MaxDividends in May 2025, which highlighted its dividend growth track record, investments in smoke-free products, and long-term earnings growth potential. MO’s stock price has appreciated by approximately 19.22% since our coverage. Investing Lawyer shares a similar view but emphasizes Altria’s durable cash flows, resilient tobacco demand, pricing power, and income-generating appeal despite ongoing ESG concerns and industry headwinds.
Altria Group, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 64 hedge fund portfolios held MO at the end of the first quarter which was 59 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 time frame. If you are looking for an AI stock that is more promising than MO and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
