In the latest close session, Altria (MO - Free Report) was up +1.26% at $72.99. The stock's change was more than the S&P 500's daily gain of 0.05%. Elsewhere, the Dow saw an upswing of 0.46%, while the tech-heavy Nasdaq depreciated by 0.64%.
Shares of the owner of Philip Morris USA, the nation's largest cigarette maker witnessed a loss of 1.54% over the previous month, trailing the performance of the Consumer Staples sector with its loss of 0.06%, and the S&P 500's gain of 0.61%.
The investment community will be paying close attention to the earnings performance of Altria in its upcoming release. The company is slated to reveal its earnings on July 30, 2026. The company is predicted to post an EPS of $1.5, indicating a 4.17% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $5.36 billion, indicating a 1.36% growth compared to the corresponding quarter of the prior year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $5.7 per share and a revenue of $20.55 billion, indicating changes of +5.17% and +2.02%, respectively, from the former year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Altria. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.04% higher. Altria is holding a Zacks Rank of #2 (Buy) right now.
Looking at its valuation, Altria is holding a Forward P/E ratio of 12.65. This denotes no noticeable deviation relative to the industry average Forward P/E of 12.65.
Also, we should mention that MO has a PEG ratio of 2.6. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Tobacco industry held an average PEG ratio of 2.25.
The Tobacco industry is part of the Consumer Staples sector. At present, this industry carries a Zacks Industry Rank of 215, placing it within the bottom 13% of over 250 industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
For those looking to find strong Consumer Staples stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Altria (MO - Free Report) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Consumer Staples sector should help us answer this question.
Altria is a member of the Consumer Staples sector. This group includes 185 individual stocks and currently holds a Zacks Sector Rank of #16. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst.
The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. Altria is currently sporting a Zacks Rank of #2 (Buy).
Within the past quarter, the Zacks Consensus Estimate for MO's full-year earnings has moved 1.5% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.
Based on the most recent data, MO has returned 25.2% so far this year. At the same time, Consumer Staples stocks have gained an average of 9.4%. This means that Altria is outperforming the sector as a whole this year.
Another stock in the Consumer Staples sector, Newell Brands (NWL - Free Report) , has outperformed the sector so far this year. The stock's year-to-date return is 44.9%.
Over the past three months, Newell Brands' consensus EPS estimate for the current year has increased 1.9%. The stock currently has a Zacks Rank #2 (Buy).
To break things down more, Altria belongs to the Tobacco industry, a group that includes 8 individual companies and currently sits at #215 in the Zacks Industry Rank. Stocks in this group have gained about 18.4% so far this year, so MO is performing better this group in terms of year-to-date returns.
On the other hand, Newell Brands belongs to the Consumer Products - Staples industry. This 35-stock industry is currently ranked #190. The industry has moved +3.5% year to date.
Going forward, investors interested in Consumer Staples stocks should continue to pay close attention to Altria and Newell Brands as they could maintain their solid performance.
The market expects Altria (MO - Free Report) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The earnings report, which is expected to be released on July 30, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus EstimateThis owner of Philip Morris USA, the nation's largest cigarette maker is expected to post quarterly earnings of $1.50 per share in its upcoming report, which represents a year-over-year change of +4.2%.
Revenues are expected to be $5.36 billion, up 1.4% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.33% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Altria?For Altria, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -1.34%.
On the other hand, the stock currently carries a Zacks Rank of #2.
So, this combination makes it difficult to conclusively predict that Altria will beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Altria would post earnings of $1.24 per share when it actually produced earnings of $1.32, delivering a surprise of +6.45%.
Over the last four quarters, the company has beaten consensus EPS estimates three times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Altria doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Altria Group remains a 'hold' as its resilient business model and robust dividends continue to appeal, despite top-line stagnation. MO's adjusted EPS grew over 7% last quarter, outperforming expectations and supporting ongoing dividend increases and share buybacks. While MO's valuation is higher than historical levels, it trades in line with BTI and at a discount to PM. It reflects improved risk perception, not a risk.
Altria Group (MO) has surged 24% over the past year, outperforming its benchmark's 19% gain. MO trades at a 14% discount to the sector median on forward P/E, at 13x versus peers' 15x. The stock offers an attractive 5.68% dividend yield, appealing to long-term, income-focused investors.
Altria Group, Inc. is rated Sell due to a 30% premium to its historical P/E, despite stagnant results and uncertain smoke-free growth. MO's Q1 outperformed the industry in smokeables, but oral tobacco remains challenged, with on! Growing shipments yet losing share amid intense competition. Management reaffirmed 2026 EPS guidance ($5.56–$5.72) but expressed caution given macro uncertainty and lack of conviction in near-term margin expansion.
Allspring Global Investments Holdings LLC boosted its holdings in Altria Group, Inc. (NYSE:MO – Free Report) by 6.0% during the 1st quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The fund owned 379,527 shares of the company’s stock after purchasing an additional 21,455 shares during the period. Allspring Global Investments Holdings LLC’s holdings in Altria Group were worth $24,851,000 as of its most recent SEC filing.
Several other large investors have also recently made changes to their positions in the business. Vanguard Group Inc. grew its position in shares of Altria Group by 1.2% during the 4th quarter. Vanguard Group Inc. now owns 160,980,626 shares of the company’s stock valued at $9,282,143,000 after acquiring an additional 1,903,530 shares during the period. State Street Corp raised its holdings in shares of Altria Group by 1.6% in the 4th quarter. State Street Corp now owns 72,830,531 shares of the company’s stock worth $4,275,886,000 after purchasing an additional 1,147,141 shares during the period. Charles Schwab Investment Management Inc. lifted its position in shares of Altria Group by 10.6% during the 4th quarter. Charles Schwab Investment Management Inc. now owns 65,516,916 shares of the company’s stock valued at $3,777,931,000 after buying an additional 6,265,780 shares during the last quarter. Geode Capital Management LLC lifted its position in shares of Altria Group by 1.6% during the 4th quarter. Geode Capital Management LLC now owns 45,984,718 shares of the company’s stock valued at $2,651,383,000 after buying an additional 729,999 shares during the last quarter. Finally, Morgan Stanley grew its stake in shares of Altria Group by 1.5% during the 4th quarter. Morgan Stanley now owns 22,306,173 shares of the company’s stock worth $1,286,174,000 after acquiring an additional 335,089 shares during the period. 57.41% of the stock is owned by hedge funds and other institutional investors.
Altria Group Stock Performance Shares of MO opened at $74.64 on Tuesday. Altria Group, Inc. has a 52-week low of $54.70 and a 52-week high of $75.28. The stock’s 50-day simple moving average is $71.84 and its 200 day simple moving average is $67.39. The stock has a market capitalization of $124.65 billion, a price-to-earnings ratio of 15.62, a price-to-earnings-growth ratio of 2.68 and a beta of 0.45.
Altria Group (NYSE:MO – Get Free Report) last issued its quarterly earnings data on Thursday, April 30th. The company reported $1.32 EPS for the quarter, topping the consensus estimate of $1.25 by $0.07. The company had revenue of $4.76 billion during the quarter, compared to analyst estimates of $4.58 billion. Altria Group had a negative return on equity of 298.69% and a net margin of 34.34%.Altria Group’s revenue was up 5.3% on a year-over-year basis. During the same quarter in the previous year, the firm earned $1.23 earnings per share. Altria Group has set its FY 2026 guidance at 5.560-5.72 EPS. On average, research analysts forecast that Altria Group, Inc. will post 5.7 earnings per share for the current fiscal year.
Altria Group Dividend Announcement The company also recently declared a quarterly dividend, which was paid on Friday, July 10th. Investors of record on Monday, June 15th were paid a $1.06 dividend. This represents a $4.24 annualized dividend and a yield of 5.7%. The ex-dividend date of this dividend was Monday, June 15th. Altria Group’s dividend payout ratio is presently 88.70%.
Insiders Place Their Bets In related news, Director Ennis Debra J. Kelly sold 5,790 shares of the business’s stock in a transaction that occurred on Tuesday, May 26th. The shares were sold at an average price of $72.25, for a total value of $418,327.50. Following the completion of the transaction, the director directly owned 73,809 shares in the company, valued at $5,332,700.25. The trade was a 7.27% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Ellen R. Strahlman sold 2,000 shares of the stock in a transaction on Tuesday, May 26th. The shares were sold at an average price of $72.56, for a total value of $145,120.00. Following the sale, the director directly owned 25,102 shares in the company, valued at $1,821,401.12. This trade represents a 7.38% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. 0.10% of the stock is currently owned by corporate insiders.
Analysts Set New Price Targets Several brokerages recently weighed in on MO. Weiss Ratings reissued a “buy (b)” rating on shares of Altria Group in a report on Tuesday, July 14th. Bank of America increased their target price on shares of Altria Group from $72.00 to $73.00 and gave the stock a “buy” rating in a research report on Friday, April 10th. Wall Street Zen downgraded shares of Altria Group from a “buy” rating to a “hold” rating in a research note on Sunday, June 21st. Stifel Nicolaus boosted their price target on shares of Altria Group from $68.00 to $77.00 and gave the company a “buy” rating in a research report on Friday, May 1st. Finally, Deutsche Bank Aktiengesellschaft upped their price target on shares of Altria Group from $60.00 to $66.00 and gave the company a “hold” rating in a research note on Monday, May 4th. Five equities research analysts have rated the stock with a Buy rating, four have issued a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus target price of $70.78.
Read Our Latest Stock Report on Altria Group
Altria Group Profile (Free Report)
Altria Group, Inc (NYSE: MO) is a U.S.-based consumer goods company whose principal business is the manufacture and sale of tobacco products. Headquartered in Richmond, Virginia, the company’s operations are focused primarily on the U.S. market and include the production, marketing and distribution of cigarettes, smokeless tobacco and cigars. Its flagship cigarette franchise in the United States is sold through its operating subsidiaries and is among the most recognizable cigarette brands in the country.
Altria’s principal operating businesses include Philip Morris USA (cigarettes), U.S.
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You can't expect much growth from Altria (MO +1.62%), but it still might be an attractive stock to buy.
*Stock prices used were the afternoon prices of July 14, 2026. The video was published on July 16, 2026.
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Altria (MO - Free Report) ended the recent trading session at $74.21, demonstrating a +1.62% change from the preceding day's closing price. This change outpaced the S&P 500's 1.01% loss on the day. Meanwhile, the Dow experienced a drop of 0.77%, and the technology-dominated Nasdaq saw a decrease of 1.4%.
The stock of owner of Philip Morris USA, the nation's largest cigarette maker has risen by 5.66% in the past month, leading the Consumer Staples sector's gain of 1.62% and the S&P 500's gain of 0.32%.
The investment community will be closely monitoring the performance of Altria in its forthcoming earnings report. The company is scheduled to release its earnings on July 30, 2026. The company is expected to report EPS of $1.5, up 4.17% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $5.36 billion, indicating a 1.36% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $5.7 per share and a revenue of $20.55 billion, demonstrating changes of +5.17% and +2.02%, respectively, from the preceding year.
Any recent changes to analyst estimates for Altria should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.04% higher. Altria currently has a Zacks Rank of #2 (Buy).
With respect to valuation, Altria is currently being traded at a Forward P/E ratio of 12.81. This expresses a discount compared to the average Forward P/E of 13.12 of its industry.
We can also see that MO currently has a PEG ratio of 2.64. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Tobacco industry currently had an average PEG ratio of 2.23 as of yesterday's close.
The Tobacco industry is part of the Consumer Staples sector. With its current Zacks Industry Rank of 219, this industry ranks in the bottom 11% of all industries, numbering over 250.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
The stock market has been a difficult beast to understand. While the market has been on a multiyear bull run, investors are on edge, as numerous warning signs have emerged that suggest it might be time to head to the sidelines.
However, the market has so far shrugged these off and continued to move higher despite significant volatility.
Not all investors may want to lean in at such an uncertain time. Still, leaving money in cash and trying to time the market has never been a winning strategy. Instead, investors may want to seek more reliable dividend stocks, which can generate steady passive income annually.
Here are two dividend stocks yielding at least 5.9% and that have annually increased their dividends for at least 50 years.
Image source: Getty Images.
Altria Group -- 5.9% Altria Group (MO +0.51%) is one of the leading tobacco companies in the world. It also owns many smoke-free tobacco brands, as well as investments in cannabis. Some of its notable brands include Marlboro, Copenhagen, and on! nicotine pouches.
The company's long-standing business also allowed it to become a Dividend King, a company that has paid and raised its annual dividend for at least 50 years. Only 57 companies in the market can boast such a feat.
Altria is currently on pace to pay $4.24 in dividends, excluding any future increases. Meanwhile, management is guiding for $5.56 to $5.72 in adjusted diluted earnings per share, giving the company about a 75% dividend payout ratio.
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Altria also has a free-cash-flow yield of about 7.13%, which also covers the annual dividend, so the company clearly has room to raise it this year.
Altria stock has also enjoyed a strong year, with shares up nearly 26% (as of July 13). In the first quarter of the year, Altria managed to grow revenue net of excise taxes by 5.2%, despite smokeable product shipments being down 2.3% year over year. Operating margins expanded 1.8% year over year to 65%, largely thanks to pricing adjustments.
Meanwhile, the company continued to see revenue growth in its oral tobacco division, despite year-over-year margin contraction. Low- to mid-single-digit-percentage projected earnings growth in 2027 should also continue to support modest increases in the dividend moving forward.
Universal Corp -- 6.5% Another Dividend King, Universal Corp (UVV +0.52%) has paid and raised its annual dividend for 56 consecutive years. Universal Corp operates in a sector similar to Altria's, serving as the leading global leaf tobacco supplier to companies that make consumer tobacco products.
The company also has an ingredients division that produces specialty plant-based ingredients, such as fruits, vegetables, and flavorings, used by food and beverage companies in their products. The stock took a hit in early February, as the company's quarterly results revealed excess supply in the leaf tobacco business, and the ingredients segment also experienced softer demand and pressure due to tariffs.
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In its most recent fiscal 2026 fourth quarter, which ended on March 31 of this year, the company did manage to grow revenue 2% year over year but struggled due to a nonrecurring, noncash goodwill charge and some tobacco investor write-downs.
Still, the company increased its quarterly dividend by a penny in May for an annual dividend of $3.32 per share. Analysts covering the stock project adjusted earnings per share of $4.30 in its current fiscal year. Free cash flow in Universal's last fiscal year nearly covered the dividend, despite the significant goodwill charge. The company should be able to pay and raise its annual dividend going forward.
Altria (MO - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this owner of Philip Morris USA, the nation's largest cigarette maker have returned -0% over the past month versus the Zacks S&P 500 composite's +1.6% change. The Zacks Tobacco industry, to which Altria belongs, has lost 1.4% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Altria is expected to post earnings of $1.50 per share for the current quarter, representing a year-over-year change of +4.2%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The consensus earnings estimate of $5.7 for the current fiscal year indicates a year-over-year change of +5.2%. This estimate has changed +0.3% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $5.87 indicates a change of +3.1% from what Altria is expected to report a year ago. Over the past month, the estimate has remained unchanged.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Altria is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Altria, the consensus sales estimate for the current quarter of $5.35 billion indicates a year-over-year change of +1.1%. For the current and next fiscal years, $20.53 billion and $20.68 billion estimates indicate +2% and +0.7% changes, respectively.
Last Reported Results and Surprise HistoryAltria reported revenues of $4.76 billion in the last reported quarter, representing a year-over-year change of +5.3%. EPS of $1.32 for the same period compares with $1.23 a year ago.
Compared to the Zacks Consensus Estimate of $4.56 billion, the reported revenues represent a surprise of +4.39%. The EPS surprise was +6.45%.
Over the last four quarters, Altria surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Altria is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Altria. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
Altria Group earns a buy rating for its robust cash flow, strong dividend coverage, and defensive qualities amid declining smoking trends. MO's pricing power and brand loyalty offset shipment declines, with Marlboro maintaining a 39.7% market share and premium dominance. Product diversification into e-vapor and oral nicotine, plus a stake in Anheuser-Busch, supports operational resilience and liquidity.
Altria (MO - Free Report) closed at $71.59 in the latest trading session, marking a -1.68% move from the prior day. This change lagged the S&P 500's daily gain of 0.81%. Meanwhile, the Dow gained 0.27%, and the Nasdaq, a tech-heavy index, added 1.3%.
Coming into today, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had lost 0.44% in the past month. In that same time, the Consumer Staples sector gained 3.31%, while the S&P 500 gained 1.13%.
Analysts and investors alike will be keeping a close eye on the performance of Altria in its upcoming earnings disclosure. The company's earnings report is set to go public on July 30, 2026. In that report, analysts expect Altria to post earnings of $1.5 per share. This would mark year-over-year growth of 4.17%. Simultaneously, our latest consensus estimate expects the revenue to be $5.35 billion, showing a 1.06% escalation compared to the year-ago quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.7 per share and revenue of $20.53 billion. These totals would mark changes of +5.17% and +1.96%, respectively, from last year.
Any recent changes to analyst estimates for Altria should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.29% increase. As of now, Altria holds a Zacks Rank of #2 (Buy).
Looking at valuation, Altria is presently trading at a Forward P/E ratio of 12.78. For comparison, its industry has an average Forward P/E of 12.78, which means Altria is trading at no noticeable deviation to the group.
Also, we should mention that MO has a PEG ratio of 2.72. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Tobacco industry had an average PEG ratio of 2.19.
The Tobacco industry is part of the Consumer Staples sector. This industry, currently bearing a Zacks Industry Rank of 213, finds itself in the bottom 14% echelons of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
As the nicotine industry shifts toward smoke-free alternatives, investors face a choice between legacy giants and nimble mid-cap players. Altria Group (MO 0.95%) and Turning Point Brands (TPB 0.32%) represent two distinct paths.
Altria dominates the traditional U.S. cigarette market while aggressively expanding its footprint in vapor and oral nicotine products. Turning Point Brands focuses on specialty accessories, such as rolling papers and niche tobacco products, that appeal to specific consumer segments. Comparing these two reveals a trade-off between massive cash distributions and high-growth potential.
The case for AltriaAltria sells cigarettes, cigars, and oral nicotine products primarily to adult consumers in the United States. Its core operations include iconic brands like Marlboro and Copenhagen, while it builds out newer segments like NJOY in the e-vapor market. The company also maintains a joint venture with Japan Tobacco to market heated tobacco products, diversifying its portfolio beyond traditional combustion products.
In FY 2025, revenue reached nearly $20.1 billion, a slight decline of approximately 1.5% from the previous year. Despite this dip, the company reported net income of nearly $6.95 billion for the period, indicating the business remains highly profitable despite volume challenges in the traditional cigarette market.
As of its December 2025 balance sheet, the debt-to-equity ratio, which compares total debt to shareholder equity, was -7.3x. This negative value indicates that total liabilities exceed shareholders’ equity. Free cash flow for the fiscal year was nearly $9.1 billion, calculated by subtracting capital expenditures from operating cash flow.
Turning Point Brands markets and distributes alternative smoking accessories and tobacco products like Zig-Zag rolling papers and Stoker's chewing tobacco. It operates through about 220,000 retail locations in North America and manages critical supply agreements with partners like Philip Morris International (PM 2.51%) subsidiary Swedish Match. The company is a niche player among tobacco stocks, focusing on high-growth accessories and specialty tobacco.
For the period ending in FY 2025, the company reported revenue of approximately $463.1 million, a substantial 28% year-over-year increase. Net income was close to $58.2 million, which shows the company is successfully scaling its higher-growth brands.
Based on the December 2025 balance sheet, Turning Point Brands has a debt-to-equity ratio of nearly 0.9x. This ratio compares total debt to shareholders’ equity, indicating a moderate level of borrowing relative to shareholders’ equity. Free cash flow, or cash from operations minus capital spending, reached approximately $43.9 million for the year.
Risk profile comparisonAltria faces regulatory hurdles, specifically with the FDA's review process for e-vapor products and enforcement against illicit flavored disposables. Litigation remains a concern, including a certified class action lawsuit related to its past investment in the vaping company Juul Labs. Furthermore, traditional tobacco volumes are declining as consumer preferences shift and price gaps between premium and discount brands widen.
Turning Point Brands is vulnerable to supply chain disruptions because it relies on a small number of third-party suppliers, such as Swedish Match. Failure to renew these licensing and supply agreements would severely restrict its market access. Additionally, the company faces intense competition from larger firms like Altria that have significantly more capital to influence retail distribution and pricing strategies.
Valuation comparisonTurning Point Brands carries a higher Forward P/E based on future earnings estimates, while Altria provides a lower P/S ratio for value-conscious investors.
MetricAltriaTurning Point BrandsSector BenchmarkForward P/E13.0x62.9x287.6xP/S ratio6.0x3.5xSector benchmark uses the SPDR XLP sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?Altria is facing significant headwinds in its main market, the U.S., due to declining smoking rates. Smoking as a habit is declining globally and has hit its lowest level in the U.S., at under 10% of all adults, down from a peak of about 46% in the mid-1960s. Altria is finding some difficulty replacing revenue from the loss of traditional smokers because of the number of e-cigarette competitors taking share in the grey market outside regulatory approval. Wall Street estimates it will take Altria about five years to grow its revenue by just 5% from 2025 levels. Still, management is finding ways to boost profits, with net income seen rising 25% to $9.3 billion in 2026 on essentially flat revenue.
Turning Points Brands should see sales rise 13% this year to about $525 million, with net income of $58 million. That’s a 45% jump in profits. Nicotine pouch sales in the U.S. as a category grew 500% last year and are expected to remain strong this year. Still, there is a risk around pouches being hit by more regulations, and the fact that oral tobacco in the past was deeply criticized for contributing to oral cancers.
So which is the better buy? The difference here is Altria’s excellent dividend payments, with the stock trading at a forward dividend yield of nearly 6%, while Turning Point Brands is at less than 1%. Coupled with its lower forward P/E ratio, MO is the stock to pick.
Altria (MO +0.34%), the largest tobacco company in America, might not seem like a reliable long-term investment. It owns Marlboro, the top cigarette brand in the country, but adult smoking rates in the U.S. have steadily declined over the past six decades. It also spun off its higher-growth overseas business as Philip Morris International (PM 0.92%) in 2008.
Yet over the past five years, Altria's stock has still rallied 56% and generated a total return of 129% after reinvesting dividends. It's also raised its dividend 60 times over the past 56 years, making it a Dividend King that has hiked its payout for at least 50 consecutive years.
Image source: Getty Images.
It pays a forward dividend yield of 5.8%, compared to the 10-Year Treasury's 4.6% yield, and it spent only 81% of its free cash flow (FCF) on dividends over the past 12 months. Let me explain why those dividends are sustainable, why its core business is still growing, and why it's a great income stock to buy this month as some investors shun stocks during the slow summer months.
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Why is Altria's business sustainable? For decades, Altria raised its cigarette prices, cut costs, and repurchased more shares to grow EPS even as revenue growth slowed. It expanded its portfolio of smoke-free products -- including e-cigarettes, nicotine pouches, and snus -- to curb its dependence on smokeable products. That's why it acquired the top e-cigarette brand, NJOY, in 2023. The expansion of its On! nicotine pouches has also been increasing its share of the oral tobacco market.
By 2028, Altria aims to generate at least $5 billion in smoke-free revenue, equivalent to 24% of its projected sales, to offset declining cigarette shipments. It also bought back 9% of its shares over the past five years, and those buybacks will continue for the foreseeable future.
Altria is naturally insulated from tariffs and trade wars, since it produces nearly all of its products within the United States and sells them here. Its smoke-free portfolio could also benefit from an FDA crackdown on the market's smaller alternative nicotine products.
Analysts expect Altria's EPS to grow at a 13% CAGR from 2025 to 2028 as those catalysts kick in. That's why its stock still looks like a bargain at 13 times this year's earnings, and why it will remain an attractive investment even if the broader market pulls back. As many investors "sell in May and go away" for the summer, I'm still willing to buy more Altria shares.
As nicotine consumption shifts toward smoke-free alternatives, investors are weighing the domestic dominance of Altria Group (MO 1.38%) against the international reach of Philip Morris International (PM +0.58%) to determine which stock is better.
Altria maintains a fortress-like hold on the United States market through traditional combustibles and oral nicotine. Meanwhile, Philip Morris International spearheads global innovation in heated tobacco and pouches. While both companies transition toward reduced-risk products, their geographic footprints and growth profiles offer distinct paths for investors eyeing this industry for their portfolios.
The case for AltriaAltria generates the bulk of its revenue from traditional filtered cigarettes like Marlboro, supplemented by oral nicotine and e-vapor products. The company primarily sells to wholesalers and large retail organizations in the United States market. Since it serves adult nicotine consumers across roughly 300,000 retailers, its domestic distribution network remains its primary competitive advantage for maintaining market share among tobacco stocks.
In FY 2025, revenue reached nearly $20.1 billion, a slight decline of approximately 1.5% from the previous year. Despite this dip, the company reported a net income of close to $6.95 billion for the period, showing that the business remains highly profitable despite volume challenges in the traditional cigarette market.
As of its December 2025 balance sheet, the debt-to-equity ratio, which compares total debt to shareholder equity, was -7.3x. This negative value indicates that total liabilities exceed shareholders’ equity. Free cash flow for the fiscal year was nearly $9.1 billion, calculated by subtracting capital expenditures from operating cash flow.
Philip Morris International operates a global business model focused on smoke-free products such as IQOS and ZYN, alongside international cigarette sales. The company serves consumers across approximately 170 markets using a mix of direct sales and independent distributors. This geographic diversity helps insulate the business from regulatory or economic shifts in any single country while driving long-term expansion.
For FY 2025, revenue grew by roughly 7% to reach nearly $40.7 billion. The company reported a net income of approximately $11.4 billion during the same period, driven by the continued expansion of its smoke-free portfolio and favorable pricing across international markets.
Based on the December 2025 balance sheet, the debt-to-equity ratio was approximately -4.9x, indicating that total liabilities exceed shareholder equity. Free cash flow for the year was close to $13.5 billion, representing the cash remaining after the company pays for its capital expenditures.
Risk profile comparisonAltria faces significant legal exposure following the March 2026 certification of a class-action antitrust lawsuit over e-cigarette sales. Regulatory hurdles also persist, as import bans on NJOY ACE products have disrupted its e-vapor strategy and forced goodwill write-downs. Furthermore, the company must contend with adult consumers moving toward cheaper discount brands and competition from illicit, flavored disposable vapes.
Philip Morris International recognized a $500 million impairment in June 2026 related to its Canadian affiliate, leading to a reduction in its earnings estimates. Geopolitical instability in Russia and Ukraine continues to threaten supply chains and expose the firm to adverse currency fluctuations. The company also relies on third-party manufacturers for IQOS devices and faces risks if governments change tax laws to treat smoke-free products like traditional cigarettes.
Valuation comparisonAltria currently trades at a lower Forward P/E than its peer, suggesting it is the more value-oriented choice based on future earnings estimates.
MetricAltriaPhilip Morris InternationalSector BenchmarkForward P/E13x21.6x287.6xP/S ratio6x6.9xSector benchmark uses the SPDR XLP sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?Smoking as a habit is declining globally and has hit its lowest level in the U.S., at under 10% of all adults, down from a peak of about 46% in the mid-1960s.
But both Altria and Philip Morris International have been great for shareholders. Each has outperformed the S&P 500 over the past five years, with the S&P 500 returning about 70% from July 2021 to today, compared to about 125% for both MO and PMI.
Altria is facing significant headwinds in its main market, the U.S., due to declining smoking rates. It’s finding some difficulty replacing revenue from the loss of traditional smokers because of the number of e-cigarette competitors taking share in the grey market outside regulatory approval. Wall Street estimates it will take Altria about five years to grow its revenue just 5% from 2025 levels.
Philip Morris International, meanwhile, has cast its lot with planning to eventually exit traditional cigarettes altogether, focusing on e-cig versions that are seeing good uptake in the global marketplace. Still, combustibles (as traditional cigarettes are known) remain the largest segment of the business, accounting for about 58% of sales, and are doing well globally. The Marlboro brand, which Philip Morris owns outside the U.S., reached its highest market share ever, at 11%, in the first quarter of 2026. Smoking isn’t declining as fast in the rest of the world as it is in the U.S. That has Wall Street seeing 6.6% revenue growth in 2026.
One thing to keep in mind is that both stocks are excellent sources of income. Altria has a forward dividend yield close to 6%, while Philip Morris International’s is more than 3.8%. Those are excellent options for income-minded investors.
So which tobacco giant is better for your portfolio’s health? Altria’s strong dividend and moderate valuation ratios overcome its sluggish growth for investor portfolios in 2026.
Altria has become a magnet for income-focused capital this year, with the stock climbing 32.55% year-to-date as retirees hunt for inflation hedges while the Fed has cut its target rate to 3.75%. Altria (NYSE:MO | MO Price Prediction) sells Marlboro, Copenhagen, Skoal, on! nicotine pouches and NJOY e-vapor, and its smokeable engine just posted a 65.1% operating margin. The question is whether the dividend is actually as bulletproof as the bulls claim.
Dividend Snapshot Metric Value Annual Dividend $4.24 per share Dividend Yield 5.73% Consecutive Years of Increases 60 increases in 56 years Most Recent Increase 3.9% (August 2025) Aristocrat-Class Status Yes (commonly recognized) Payout Ratios Leave Real Room Despite Volume Drag Altria earned $5.42 in adjusted diluted EPS for 2025 and pays $4.24 annually, putting the earnings payout ratio at 78.2%. That is elevated by general standards but normal for a mature tobacco operator. Cash coverage is what matters here. The company paid $7.0 billion in dividends in 2025 against operating income of $9.899 billion, with capex of only $175 to $225 million.
Metric TTM Value Assessment Earnings Payout Ratio 78.2% Elevated but Manageable FCF Payout Ratio (est.) ~76% Healthy 2026 EPS Guidance $5.56 to $5.72 Lowers Payout Further Negative Equity Reflects Buybacks, Not Distress Signals Altria carries negative shareholders’ equity of $3.211 billion, a function of years of aggressive buybacks. EBITDA of $15.79 billion against the debt load keeps leverage manageable, and cash sits at $3.531 billion. The smokeable margin expansion to 65.1% confirms pricing power is offsetting the 5% industry volume decline.
20 Years of Increases and Counting Year Annual Dividend 2026 (run rate) $4.24 2025 $4.16 2024 $4.08 2023 $3.92 2022 $3.68 2021 $3.52 The 5-year dividend CAGR runs roughly 3.8%, in line with management’s mid-single-digit growth target through 2028.
Management’s Tone: Confident, Not Hedging CEO Billy Gifford told investors on the Q1 2026 call: “We delivered a strong start to the year, growing adjusted diluted EPS by 7.3% in the first quarter. Our highly cash-generative businesses supported significant returns to shareholders through dividends and share repurchases.” On the prior call, he noted the company “returned $8 billion to shareholders through dividends and share repurchases combined” in 2025. That tone reflects confidence.
Verdict: Safe, With Pricing Power Doing the Heavy Lifting Dividend Safety Rating: Safe. The 78% earnings payout is the only number I would flag, but 2026 guidance of $5.56 to $5.72 mechanically eases it. I would be comfortable owning Altria for income if you accept that pricing power drives the thesis. I would be cautious if Marlboro share losses accelerate past current declines or if regulators target menthol and nicotine caps more aggressively. For now, the dividend looks intact.
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Altria (MO - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this owner of Philip Morris USA, the nation's largest cigarette maker have returned +3.9% over the past month versus the Zacks S&P 500 composite's -1.8% change. The Zacks Tobacco industry, to which Altria belongs, has gained 1.7% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Altria is expected to post earnings of $1.48 per share for the current quarter, representing a year-over-year change of +2.8%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The consensus earnings estimate of $5.68 for the current fiscal year indicates a year-over-year change of +4.8%. This estimate has remained unchanged over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $5.87 indicates a change of +3.4% from what Altria is expected to report a year ago. Over the past month, the estimate has remained unchanged.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Altria is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Altria, the consensus sales estimate of $5.35 billion for the current quarter points to a year-over-year change of +1.1%. The $20.53 billion and $20.68 billion estimates for the current and next fiscal years indicate changes of +2% and +0.7%, respectively.
Last Reported Results and Surprise HistoryAltria reported revenues of $4.76 billion in the last reported quarter, representing a year-over-year change of +5.3%. EPS of $1.32 for the same period compares with $1.23 a year ago.
Compared to the Zacks Consensus Estimate of $4.56 billion, the reported revenues represent a surprise of +4.39%. The EPS surprise was +6.45%.
Over the last four quarters, Altria surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Altria is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Altria. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Altria (MO - Free Report) closed the most recent trading day at $73.21, moving +1.58% from the previous trading session. The stock's change was more than the S&P 500's daily loss of 0.01%. Meanwhile, the Dow experienced a rise of 0.14%, and the technology-dominated Nasdaq saw a decrease of 0.46%.
Heading into today, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had lost 0.06% over the past month, outpacing the Consumer Staples sector's loss of 0.12% and the S&P 500's loss of 1.4%.
The investment community will be paying close attention to the earnings performance of Altria in its upcoming release. The company is slated to reveal its earnings on July 30, 2026. The company is expected to report EPS of $1.48, up 2.78% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.35 billion, up 1.06% from the prior-year quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $5.68 per share and a revenue of $20.53 billion, indicating changes of +4.8% and +1.96%, respectively, from the former year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Altria. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Altria presently features a Zacks Rank of #2 (Buy).
Investors should also note Altria's current valuation metrics, including its Forward P/E ratio of 12.69. This indicates a discount in contrast to its industry's Forward P/E of 12.78.
Also, we should mention that MO has a PEG ratio of 2.7. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Tobacco industry was having an average PEG ratio of 2.06.
The Tobacco industry is part of the Consumer Staples sector. At present, this industry carries a Zacks Industry Rank of 217, placing it within the bottom 12% of over 250 industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
It's not fun mapping out apocalyptic stock market scenarios, but it's worth knowing how your portfolio might hold up under duress. Stocks have been in a bull market for most of the past couple of decades, but there's bound to be some adversity -- it's part of being a long-term investor.
You shouldn't necessarily avoid risk. Often, younger, faster-growing companies, or tech stocks at the cutting edge of innovation, can generate life-changing returns. But it's wise to include some blue chip dividend stocks that have time-tested, rock-solid businesses that will endure, no matter what happens to the broader market.
These three stocks are Dividend Kings, meaning they have each raised their dividend for at least 50 consecutive years. They probably belong in your portfolio.
Image source: The Motley Fool.
1. This could be the world's most resilient business Altria Group (MO +0.03%) sells tobacco and nicotine products in the United States, led by its Marlboro cigarette brand. Smoking rates in the United States have steadily declined for many decades. Yet Altria Group has 56 consecutive years of annual dividend increases. And yes, Altria ships fewer cigarettes each year. Despite that, Altria continues to grow its profits by cutting costs and raising prices. Nicotine might be the most addictive legal substance on Earth, which affords tobacco companies unique pricing power.
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The obvious concern is that eventually, this playbook won't work as volumes shrink too much to overcome. But that concern is now decades old, and Altria still chugs on. Management has failed to diversify the business, but there's still time to get that right over the coming years. Altria's dividend payout ratio is still manageable at 75% of 2026 earnings estimates, and Wall Street anticipates low-to-mid single-digit annualized earnings growth.
Until then, Altria stock boasts a robust 5.9% dividend yield, sells a recession-proof product, and will almost assuredly continue inching that dividend higher year after year. Investors should be able to buy Altria and sleep well at night, at least for the next several years.
2. This retail giant still has a bright future Walmart (WMT +0.39%) is the world's largest retailer and a focal point of consumer spending in the United States. Its massive size and scale give it leverage with suppliers and overwhelming efficiencies to sell its goods at low prices that competitors simply cannot sustain. Today, roughly 90% of Americans live within a short drive of a Walmart store.
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Consumers can go to Walmart for groceries and household essentials, pick out a new TV, and have their tires changed, all in the same trip. Therefore, Walmart stores are typically busy, and that constant activity has made it a tremendous dividend stock with 53 consecutive annual dividend increases. Walmart has also adapted to industry changes, utilizing its store network to compete with Amazon in e-commerce. That has become a major growth engine for the future.
Analysts see Walmart growing earnings by 9% to 10% annually over the next three to five years, funding more dividend hikes along the way. Shoppers will almost certainly continue shopping at Walmart, so there's almost zero risk that the bottom will fall out of this world-class business model. Investors can buy, hold, and continue to count on Walmart no matter how shaky the markets may become.
3. A Buffett favorite and iconic brand The Coca-Cola Company (KO +1.03%) adds to this ongoing theme of products people need, no matter what happens. People will always get thirsty, and Coca-Cola is the best at capitalizing on that. It's a global beverage juggernaut with countless distribution points worldwide, including stores, venues, vending machines, you name it. Coca-Cola is known for its namesake soda but also sells dozens of other brands of soda, water, juice, coffee, tea, and more.
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There's no better endorsement a stock can get than from legendary investor Warren Buffett, who bought Coca-Cola stock for Berkshire Hathaway in the late 1980s. Buffett is a known fan of the iconic brand, and Berkshire Hathaway still holds the stock today. Part of the reason for that is Coca-Cola's clockwork-like dividend. The company has paid and raised the dividend for 64 consecutive years. Plus, the stock offers a solid initial dividend yield of 2.5% right now.
There's no reason to doubt the resiliency of Coca-Cola's dividend. Analysts see the company growing earnings by an average of 7% to 8% annually over the next three to five years. Coca-Cola sells more than 2.2 billion servings each day. All those little transactions add up to massive profits, and it's unlikely people worldwide will suddenly stop drinking its products. Investors can be like Buffett and put their hard-earned capital into Coca-Cola stock.
Altria (MO - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this owner of Philip Morris USA, the nation's largest cigarette maker have returned -5.2% over the past month versus the Zacks S&P 500 composite's +1.6% change. The Zacks Tobacco industry, to which Altria belongs, has lost 4% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Altria is expected to post earnings of $1.48 per share, indicating a change of +2.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $5.68 points to a change of +4.8% from the prior year. Over the last 30 days, this estimate has remained unchanged.
For the next fiscal year, the consensus earnings estimate of $5.87 indicates a change of +3.4% from what Altria is expected to report a year ago. Over the past month, the estimate has remained unchanged.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Altria is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Altria, the consensus sales estimate for the current quarter of $5.35 billion indicates a year-over-year change of +1.1%. For the current and next fiscal years, $20.53 billion and $20.68 billion estimates indicate +2% and +0.7% changes, respectively.
Last Reported Results and Surprise HistoryAltria reported revenues of $4.76 billion in the last reported quarter, representing a year-over-year change of +5.3%. EPS of $1.32 for the same period compares with $1.23 a year ago.
Compared to the Zacks Consensus Estimate of $4.56 billion, the reported revenues represent a surprise of +4.39%. The EPS surprise was +6.45%.
Over the last four quarters, Altria surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Altria is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Altria. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
Altria (MO - Free Report) ended the recent trading session at $68.97, demonstrating a -1.75% change from the preceding day's closing price. The stock's performance was behind the S&P 500's daily loss of 1.22%. Meanwhile, the Dow lost 0.98%, and the Nasdaq, a tech-heavy index, lost 1.35%.
The stock of owner of Philip Morris USA, the nation's largest cigarette maker has fallen by 5.15% in the past month, lagging the Consumer Staples sector's gain of 1.54% and the S&P 500's gain of 1.56%.
The investment community will be paying close attention to the earnings performance of Altria in its upcoming release. The company is slated to reveal its earnings on July 30, 2026. The company is forecasted to report an EPS of $1.48, showcasing a 2.78% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.35 billion, up 1.06% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $5.68 per share and a revenue of $20.53 billion, indicating changes of +4.8% and +1.96%, respectively, from the former year.
Any recent changes to analyst estimates for Altria should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. As of now, Altria holds a Zacks Rank of #2 (Buy).
In terms of valuation, Altria is presently being traded at a Forward P/E ratio of 12.35. This valuation marks a discount compared to its industry average Forward P/E of 12.77.
Also, we should mention that MO has a PEG ratio of 2.62. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Tobacco industry stood at 2.12 at the close of the market yesterday.
The Tobacco industry is part of the Consumer Staples sector. Currently, this industry holds a Zacks Industry Rank of 193, positioning it in the bottom 21% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
Wall Street’s careening trajectory has left investors grappling with a highly volatile macro climate.
Despite brief relief from a tentative US-Iran ceasefire, the Federal Reserve’s latest Summary of Economic Projections paints a hawkish picture – slashing GDP expectations while projecting sticky PCE inflation at 3.6%.
With newly appointed Fed Chair Kevin Warsh signaling that interest rates will remain “higher for longer” and keeping a 2026 rate hike firmly on the table, hyper-growth sectors face sustained pressure.
When structural inflation and policy uncertainty cloud the horizon, cash flow is king.
Navigating this choppy backdrop requires anchoring a portfolio in rock-solid, defensive cash generators that balance market turbulence with reliable yield.
Irrespective of where the broader market heads next, three iconic dividend powerhouses offer the ultimate defensive blueprint for resilient income: Altria, Walmart, and Coca-Cola.
Tobacco may be in structural volume decline across the US – but Altria Group Inc has forged one of the market’s most paradoxically durable income stories.
MO has raised its dividend for 56 consecutive years, currently yielding “6.15%”, an uncommon payout for an investment-grade income stock.
Nicotine’s addictive properties afford pricing leverage few consumer categories can replicate, which is why the company’s payout ratio stands at about 75% of 2026 earnings estimates – a serviceable level that leaves capacity for further hikes.
As cigarette volumes contract annually, Altria offsets the pressure through disciplined cost reduction and consistent price increases on its Marlboro-led portfolio.
For MO, Wall Street analysts project low- to mid-single-digit annualized earnings growth, sufficient to sustain the dividend’s upward trajectory for the foreseeable future.
Walmart – the world’s largest retailer brings an operational moat of almost incomprehensible scale to the dividend equation.
With roughly 90% of the US population living within a short drive of a Walmart store, the company holds a captive consumer base spanning grocery, general merchandise, pharmacy, and automotive services, often under a single roof.
That physical density, combined with supplier leverage derived from WMT’s purchasing volume, enables sustained low-price leadership that competitors cannot match at equivalent margins.
Walmart has raised its dividend for 53 consecutive years, and analysts project 9% to 10% annual earnings growth over the next three to five years, driven by accelerating e-commerce penetration and an expanding retail media advertising business.
So, the dividend, by any structural measure, faces minimal risk.
There aren’t a lot of businesses that can replicate the earnings consistency of Coca-Cola.
The company sells more than 2.2 billion product servings daily across a portfolio extending well beyond its flagship cola, encompassing water, juice, coffee, tea, and energy drinks, distributed through virtually every commercial channel globally.
That volume underpins a 64-year dividend growth streak, the longest among the three names profiled here, with a current yield of 2.65%.
Analysts project at least 7% compound annual earnings growth over the next three to five years, supported by price and mix improvements alongside geographic diversification across developed and emerging markets.
Perhaps the most durable endorsement: Warren Buffett’s Berkshire Hathaway has held Coca-Cola stock continuously since the late 1980s – an institutional conviction that, across four decades, has proven well-placed.
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
Earned income is fragile. A layoff notice, a medical issue, or a sudden change in management can sever it overnight. Passive income from dividend stocks does not care about any of that. The check clears whether you show up to work, whether the market is green or red, and whether the talking heads on television are predicting a recession or a rally.
That is the appeal of high-yield equities over real estate, private credit, or any of the other income alternatives that have become fashionable. Stocks are liquid. You can sell a fraction of a position before lunch. You cannot do that with a rental duplex or a piece of farmland. And when a company has paid investors uninterrupted for decades through wars, recessions, and pandemics, the income starts to feel less like a yield and more like a utility bill arriving in reverse.
Let’s be clear, I can’t stand tobacco as a product, but when we screened our 24/7 Wall St. dividend equity research database, looking for stocks that pay massive dividends, and we found a company that can generate over $600 a year in passive annual income if you invest just $10,000 in it at the time of this writing.
Altria Group Stock: Altria Group (NYSE:MO | MO Price Prediction) Yield: 5.88% Shares for $10,000: ~143 shares at $69.59 Annual Passive Income: ~$609 Altria is the largest U.S. tobacco company, with a portfolio built around Marlboro, Black & Mild, L&M, Parliament, and Virginia Slims on the smokeable side, plus Copenhagen, Skoal, and the on! nicotine pouch line on the oral tobacco side. Smokeable products generated $4.76 billion in Q1 2026 revenue at a 65.1% adjusted operating margin, while oral tobacco contributed $669 million. This is a cash-printing machine wrapped in regulatory armor.
The dividend is structurally high for reasons that have nothing to do with distress. Domestic cigarette volumes decline every year, ESG mandates lock entire institutional buyer bases out of the stock, and the company carries negative shareholders’ equity of -$3.21 billion after years of aggressive buybacks. Novice investors often misread that figure. Negative book value here reflects management’s choice to return capital to shareholders through aggressive buybacks. Altria has paid 60 dividend increases in 56 years and just raised the quarterly payout 3.9% to $1.06 per share, putting the annualized rate at $4.24.
The coverage math is reassuring. Full-year 2025 operating income of $9.9 billion covered $7.0 billion in dividends at 1.4x, and Q1 2026 operating income of $2.96 billion covered the quarterly payout with room to spare. CEO Billy Gifford reaffirmed 2026 adjusted diluted EPS guidance of $5.56 to $5.72, with management targeting mid-single digit annual dividend growth through 2028.
Institutional ownership sits at 63.5%, with Vanguard and BlackRock the dominant holders through their index complexes. The company is in the middle of a $2 billion share repurchase program running through December 31, 2026, having bought back 4.5 million shares at an average $62.33 in Q1 2026. Every share retired permanently lifts the dividend yield on remaining stock.
A $10,000 position in Altria buys roughly 143 shares at the recent $69.59 price, producing about $609 in annual passive income at the current $4.24 dividend rate, a blended yield of 5.88%. That income arrives in four quarterly installments without you lifting a finger, and given the 56-year track record, the payment next year is almost certainly going to be larger than the payment this year.
The hidden power of a stock like this shows up when you stop spending the dividend and start reinvesting it. At a 5.88% starting yield with mid-single-digit dividend growth, the income stream doubles roughly every decade without you adding a single new dollar of capital. That is the quiet engine behind every retirement portfolio that ever generated more cash than its owner could spend. Altria is the kind of slow-burn position that compounds its way into significance while you forget you own it.
At the 24% federal bracket, a $1 million dividend portfolio generating roughly $45,000 in annual income can hand the IRS between $6,750 and $10,800 every year, depending on how much of that income is qualified versus ordinary.
Inside a Roth IRA, that same income lands in your account untouched. This article walks through exactly what that delta looks like on six named holdings using verified 2026 federal brackets and current yields.
The $1 Million Portfolio and Its Blended Yield Here is the construction: Six holdings, allocated to produce a realistic blended yield in the 4% to 5% range, weighted toward income generation rather than growth.
Holding Allocation Current Yield Annual Income Tax Character Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) $300,000 ~4% $10,500 Qualified Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) $100,000 2% $2,250 Qualified Altria (NYSE: MO) $150,000 6% $8,760 Qualified Verizon (NYSE:VZ) $150,000 6% $8,640 Qualified AbbVie (NYSE:ABBV) $100,000 3% $3,080 Qualified Realty Income (NYSE:O) $200,000 5% $10,540 Ordinary (REIT) For the example portfolio above, the gross annual income is approximately $43,770. Of that, roughly $10,540 from Realty Income flows through as ordinary income, while the remaining $33,230 from the other five holdings qualifies for long-term capital gains rates.
The Tax Delta: Roth vs. Taxable at 24% At the 24% bracket, single filers with income between $50,400 and $105,700 pay 15% on qualified dividends and the full 24% on ordinary REIT distributions.
Taxable account: Qualified portion of $33,230 taxed at 15% costs about $4,985. The Realty Income ordinary income of $10,540 taxed at 24% costs about $2,530. Total tax drag: roughly $7,515. Net income: approximately $36,255. Roth IRA: Full $43,770 stays in the account. Net income: $43,770. Annual Roth advantage: roughly $7,515. 10-year Roth advantage (no reinvestment): approximately $75,150. Why each name belongs here matters. Realty Income is the priority Roth holding: as a REIT, distributions are taxed as ordinary income at your full marginal rate. Its $0.2705 monthly dividend compounds inside a Roth with zero leakage. Altria and Verizon pay qualified dividends, but their absolute yields make the dollar advantage meaningful. SCHD, JNJ, and AbbVie pay qualified dividends with lower yields, so the per-dollar Roth lift is smaller, but the compounding still matters across decades.
The Bracket Multiplier The same portfolio looks very different across brackets. Qualified dividend rates step from 15% to 20%, and the top 37% bracket kicks in above $640,600 for single filers in 2026. High earners also face the 4% net investment income tax.
Bracket Qualified Rate Ordinary Rate Annual Tax Cost Roth Advantage 22% 15% 22% ~$7,304 ~$7,304 24% 15% 24% ~$7,515 ~$7,515 32% 15% 32% ~$8,357 ~$8,357 37% 24% 41% ~$12,209 ~$12,209 A 37% bracket investor loses nearly double what a 22% bracket investor loses on the identical portfolio.
The Insight Most Readers Miss The Roth advantage compounds year after year. At the 24% bracket, the $7,515 annual delta reinvested at a conservative 4% compounding rate becomes roughly $90,000 over 10 years and roughly $225,000 over 20 years. That is the permanent cost of holding these specific positions outside a Roth, before any share price appreciation. With the 10-year Treasury at 4%, that reinvestment assumption is grounded in current rates.
What to Do Calculate the annual tax cost on any REIT holding at your bracket before your next filing. Realty Income’s 5% yield as ordinary income is the highest-friction position in this portfolio. Run the Roth conversion math on the highest-yielding ordinary-dividend positions first. REITs and BDCs carry the largest per-dollar lift. Model a phased conversion that prioritizes ordinary-income payers, then high-yield qualified payers like Altria and Verizon, before touching lower-yield qualified holdings like AbbVie and Johnson & Johnson.
CalPERS reports an average annual retirement benefit of approximately $45,264. Many California public employees who spend a full career in the system and retire with 30 or more years of service receive benefits above that average. A $1.4 million portfolio generating a conservative 3.5% yield produces about $49,000 a year in income, slightly exceeding the published average benefit. At higher yield levels, the same portfolio can generate substantially more income than the average pension payment.
The Income Target and the Base Math The calculation is straightforward: divide the income target by the portfolio yield to determine the capital required. Generating $45,264 annually at a 3.5% yield requires roughly $1.29 million of invested assets. A $1.4 million portfolio therefore provides a modest cushion above the average CalPERS retirement benefit.
With the 10-year Treasury yielding about 4.45%, investors accepting a dividend yield below that level are generally trading current income for other potential advantages, including dividend growth, favorable tax treatment in some cases, and the possibility of long-term capital appreciation.
Conservative Tier: 3% to 4% Yield This is the broad dividend-growth lane. Vanguard High Dividend Yield ETF (NYSEARCA:VYM) sits here, with an expense ratio of 0.04% and a distribution yield in the low 3% range. At 3.5%, $1.4 million produces $49,000 a year. At 4%, the same capital produces $56,000.
The reward is diversification across hundreds of names, rising dividends most years, and a principal balance that has historically appreciated alongside the broader market. This tier is most likely to keep pace with the CalPERS 2% cost-of-living adjustment and then some.
Moderate Tier: 5% to 7% Yield Realty Income (NYSE:O | O Price Prediction) yields 5.3% on its $3.23 annualized dividend, having paid a 670th consecutive monthly dividend with shares at $61. Altria (NYSE:MO) yields 5.8% on a $4.20 annualized payout, with shares at $70 and 2026 EPS guidance of $5.56 to $5.72.
A blend of net-lease REITs, tobacco, and preferred-share funds lands the portfolio in the 6% range. At 6%, $1.4 million produces $84,000 a year, nearly doubling the CalPERS average on the same capital. Dividend growth slows in this tier but does not stop.
Aggressive Tier: 8% to 14% Yield NEOS S&P 500 High Income ETF (NASDAQ:SPYI) runs a covered-call strategy on the S&P 500 designed for high monthly income in a tax efficient manner with the potential for equity appreciation in rising markets, with an expense ratio of 0.68% and net assets near $6.9 billion. Its distribution yield typically sits in the low double digits. Main Street Capital pays a regular monthly dividend of $0.26 plus a $0.30 quarterly supplemental, for total annualized income near $4.32 per share at a price of $51.
At a blended 10% yield, $1.4 million produces $140,000 a year, roughly triple the CalPERS average. The catch is that covered-call funds cap upside in rising markets and many high-yield vehicles see principal drift lower over long stretches. The investor in this tier is closer to spending down an asset than living off its growth.
Why the Lowest Yield Often Wins CalPERS pensions carry a 2% annual COLA cap, and CPI hit 332.4 in April 2026. A dividend-growth portfolio compounding payouts at 6% to 8% annually doubles its income in roughly 9 to 12 years. A 12% yield with no growth stays flat in nominal terms and loses purchasing power every year inflation runs hot. Wes Moss made the same point on the Clark Howard Podcast: “dividends have grown at twice the rate on average of inflation”, which is the structural advantage the aggressive tier gives up for current cash.
What to Do With This Math Calculate actual annual spending, not gross salary. Most retirees need to replace 70% to 80% of pre-retirement income, so the real target may be smaller than the CalPERS average suggests. Compare the trailing 10-year total return of a 3% to 4% dividend-growth fund against a 10%-plus covered-call or BDC product. The compounding gap usually shows up after year seven. Model the tax impact in your bracket. REIT distributions, BDC dividends, and covered-call ETF payouts each have different tax treatment, and a high-tax state like California can swing the after-tax yield by more than a percentage point.
Altria (MO - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this owner of Philip Morris USA, the nation's largest cigarette maker have returned -4.9% over the past month versus the Zacks S&P 500 composite's +5.4% change. The Zacks Tobacco industry, to which Altria belongs, has gained 1.3% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Altria is expected to post earnings of $1.48 per share, indicating a change of +2.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.7% over the last 30 days.
The consensus earnings estimate of $5.68 for the current fiscal year indicates a year-over-year change of +4.8%. This estimate has changed +0.4% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $5.87 indicates a change of +3.4% from what Altria is expected to report a year ago. Over the past month, the estimate has changed +0.6%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Altria is rated Zacks Rank #2 (Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Altria, the consensus sales estimate for the current quarter of $5.35 billion indicates a year-over-year change of +1.1%. For the current and next fiscal years, $20.53 billion and $20.68 billion estimates indicate +2% and +0.7% changes, respectively.
Last Reported Results and Surprise HistoryAltria reported revenues of $4.76 billion in the last reported quarter, representing a year-over-year change of +5.3%. EPS of $1.32 for the same period compares with $1.23 a year ago.
Compared to the Zacks Consensus Estimate of $4.56 billion, the reported revenues represent a surprise of +4.39%. The EPS surprise was +6.45%.
Over the last four quarters, Altria surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Altria is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Altria. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
At the 24% federal bracket, a portfolio throwing off $40,000 in high-yield dividend income hands roughly $9,600 to the IRS every year when those shares sit in a taxable account treated as ordinary income. For investors in the gap years between retirement and RMD age 73, that drag compounds quietly until required minimum distributions force the math into the open.
The Closing Window Before RMDs Under SECURE 2.0, the RMD age sits at 73 for taxpayers born between 1951 and 1959 and steps up to 75 for those born in 1960 or later. The years between retiring and that first forced distribution are the cleanest window to convert traditional IRA assets into a Roth, harvest qualified dividends at the 0% long-term capital gains rate (available up to roughly $96,000 of taxable income for joint filers in 2026) and relocate the highest-yielding positions before ordinary-income withdrawals take over. Roth IRAs carry no RMD for the original owner, which is the entire point of the relocation.
The Tax Delta: Roth Versus Taxable at 24% Take a $500,000 high-yield position generating $40,000 in annual dividends. If those payouts were treated as ordinary income at the 24% bracket, the net drops to $30,400. Inside a Roth, it stays at $40,000. The annual delta is $9,600, and it repeats every year the position is held. Qualified dividends from the blue chips below get preferential LTCG treatment, so the realized gap is smaller than the ordinary-rate worst case, but it widens fast once household income climbs above the 0% LTCG threshold or if Congress lets current rates rise.
The Portfolio Five NYSE-listed dividend payers, ranked by current yield. The higher-yield names carry the strongest case for Roth placement during the gap-year window.
Altria (NYSE:MO | MO Price Prediction): current yield 6%, quarterly dividend $1.06. The largest absolute income stream in the group and the position where Roth shelter saves the most dollars per year. Verizon Communications (NYSE:VZ): current yield 6%, with 26+ consecutive years of annual dividend increases. Same logic as MO: large income, large tax footprint outside a Roth. AT&T (NYSE:T): current yield 4%, annualized dividend $1.11. Stable at the current rate for four-plus years after the 2022 reset. Procter & Gamble (NYSE:PG): current yield 3%, with 70+ consecutive years of increases. Lower starting yield, but compounded raises make the Roth shelter pay off across a 20-year horizon. Johnson & Johnson (NYSE:JNJ): current yield 2%, after a Q2 2026 raise to $1.34 per quarter and 64 consecutive years of hikes. The dividend growth builds the Roth case here, even with a modest starting yield. The Bracket Multiplier The 24% number is the middle of the band. Federal brackets for 2026 sit at 22%, 24%, 32%, and 37%. Apply each to the same $40,000 in dividends treated as ordinary income, and the annual Roth advantage scales linearly: a 22% household trims less than a 37% household to the IRS, but every bracket pays. The higher the bracket, the more urgent the asset-location decision becomes during the gap years, when conversion taxes are still cheap.
The Insight Most Readers Miss The real Roth advantage is that $9,600 delta reinvested tax-free, every year, with no future RMD pulling capital back out. Average Baby Boomer 401(k) balances of $267,900 and IRA balances of $257,002 mean millions of pre-retirees are about to start RMDs on accounts large enough that asset location drives the next decade of after-tax income more than stock selection. Held outside a Roth, the tax cost on a $40,000 dividend stream is permanent and recurring. Held inside, it is zero.
What to Do If your highest-yielding names sit in a taxable account, calculate your annual tax cost at your bracket before the next filing and rank positions by absolute dollar drag. Model a phased Roth conversion across the gap years, starting with the highest-yielders (MO, VZ, T in this group) before RMDs raise your marginal bracket. If your 2026 taxable income will land below the $96,000 MFJ threshold, harvest qualified dividends or convert at the 0% LTCG rate while the window is open.
Key Takeaways Campbell's Q3 revenues are expected to be $2.39 billion, down 3.6% year over year. Campbell's Q3 EPS is expected at 48 cents, down 34.3% year over year. CPB Meals & Beverages shows resilience, led by Rao's and demand for broth, soup and meal solutions. The Campbell's Company (CPB - Free Report) is likely to witness a top and bottom-line decline when it reports third-quarter fiscal 2026 earnings on June 8. The Zacks Consensus Estimate for revenues is pegged at $2.39 billion, indicating a decrease of 3.6% from the prior-year quarter’s reported figure.
The consensus mark for earnings has fallen by a penny over the past 30 days to 48 cents a share, which suggests a decline of 34.3% from the figure reported in the year-ago period. CPB has a trailing four-quarter negative earnings surprise of about 4%, on average.
Factors Likely to Influence CPB’s Upcoming ResultsCampbell’s third-quarter performance is likely to have remained under pressure, reflecting continued weakness in its Snacks business. During the second-quarter earnings discussion, management highlighted challenged demand trends across the segment, particularly in chips and pretzels, where increased competitive activity and share pressures weighed on performance.
The company has been focused on restoring competitiveness through sharper value offerings, promotional support and improved in-market execution. However, management indicated that the Snacks recovery would take time, suggesting that category headwinds and competitive pressures likely continued to weigh on volumes and sales during the quarter. Our model suggests a 4.8% volume decline and a 3.9% revenue decline for the Snacks segment for the third quarter.
Another factor likely to hurt third-quarter results is the continued disruption within the Fresh Bakery business. On its last earnings call, management noted that manufacturing and distribution execution challenges had emerged before the winter storms and were expected to remain a third-quarter headwind as the company worked to improve service levels and on-shelf availability. Management also indicated that certain promotional activities would be scaled back while operational improvements were implemented, with normalization not anticipated until the fourth quarter. Execution challenges and reduced promotional support may have constrained sales and profitability in the reported quarter.
Margin performance is also likely to have remained pressured. Campbell’s continues to face cost inflation, tariff-related expenses and broader supply-chain cost headwinds, which weighed on profitability in the first half of fiscal 2026. Management signaled plans for incremental trade investments and targeted promotional activity to enhance value perception and strengthen competitiveness in key categories. Persistent volume softness in Snacks may have also resulted in manufacturing and overhead deleverage, weighing on bottom-line performance. We expect the gross margin to contract 330 basis points to 27.1% in the third quarter.
On the positive side, Campbell’s Meals & Beverages segment has continued to demonstrate resilience, supported by favorable cooking-at-home trends and solid in-market performance across key brands. Continued strength in Rao’s, along with demand for broth, cooking-oriented soup offerings and meal solutions, is likely to have offset weakness in Snacks.
Earnings Whispers for CPBOur proven model doesn’t conclusively predict an earnings beat for Campbell's this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Campbell's carries a Zacks Rank #5 (Strong Sell) and has an Earnings ESP of +0.81%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable CombinationHere are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
Altria Group, Inc. (MO - Free Report) currently has an Earnings ESP of +2.72% and a Zacks Rank of 2. The Zacks Consensus Estimate for its upcoming quarter’s revenues is pegged at $5.35 billion, indicating a 1.1% rise from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Altria’s earnings is pegged at $1.48 per share, implying 2.8% growth from the year-ago quarter. MO delivered a trailing four-quarter earnings surprise of 2.9%, on average.
Albertsons Companies (ACI - Free Report) currently has an Earnings ESP of +14.25% and a Zacks Rank of 3. The consensus estimate for the quarterly revenues is pinned at $24.82 billion, which indicates a 0.3% dip from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Albertsons’ upcoming quarter’s EPS is pegged at 55 cents, which is in line with the year-ago period figure. ACI delivered a trailing four-quarter earnings surprise of 8.9%, on average.
Darling Ingredients (DAR - Free Report) currently has an Earnings ESP of +22.16% and a Zacks Rank #3. The consensus estimate for quarterly revenues is pegged at $1.73 billion, which indicates an increase of 17.1% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Darling Ingredients’ upcoming quarter’s earnings per share is pegged at $1.20, calling for a substantial jump from the year-ago period’s figure of 9 cents. DAR delivered a trailing four-quarter earnings surprise of 16.1%, on average.
Item 1 of 3 Flavored vape cartridges are pictured for sale at a shop in Atlanta, Georgia, U.S., September 26, 2019. REUTERS/Elijah Nouvelage/File Photo
[1/3]Flavored vape cartridges are pictured for sale at a shop in Atlanta, Georgia, U.S., September 26, 2019. REUTERS/Elijah Nouvelage/File Photo Purchase Licensing Rights, opens new tab
CompaniesLONDON, June 4 (Reuters) - Six U.S. senators, including Democratic whip Dick Durbin and Elizabeth Warren, wrote public letters to tobacco giants Reynolds American and Altria (MO.N), opens new tab on Thursday to ask questions about donations and lobbying of the Trump administration, saying the companies had enjoyed a "lucrative payday" after spending millions to curry favour with the president.
The letter comes after the U.S. Food and Drug Administration laid out a new "enforcement discretion" policy in which it will allow some manufacturers to sell vapes and nicotine pouches without the legally required licence. The move could unleash hundreds or more vapes onto the market, and followed pressure from the White House for change.
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It also followed political donations from both Reynolds, the U.S. subsidiary of British American Tobacco (BATS.L), opens new tab, and Altria as recently as April, and a meeting between President Donald Trump and tobacco executives in May.
A bar chart showing a group of tobacco or vape group's contributions to entities or projects linked to Trump"Money well spent," the letters, dated June 4, said, adding that the donations and lobbying had enabled tobacco makers to circumvent federal laws to sell addictive vapes, harming the FDA's independence.
"But for you and your shareholders, this was a lucrative payday after years of unsuccessful legislative and regulatory efforts to weaken federal tobacco oversight," it said, asking for details on donations, meetings and products that will benefit from the change.
"FDA's regulatory treatment of nicotine pouches and vapes is rooted in recent evidence that has found that these products can help adults quit smoking," White House spokesperson Kush Desai said.
An Altria spokesperson said "the guidance is an important step toward addressing the illicit market by pairing enforcement with expansion of a legal, regulated marketplace for smoke-free products," adding that the company is reviewing the implications of its product strategy and will continue to compete within the FDA regulated marketplace.
Reynolds did not immediately respond to requests for comment.
The companies have complained for years that FDA policy has helped fuel a booming market for unlicensed devices mostly from China. Reynolds estimates this illegal market is worth some £7 billion ($9.41 billion).
The companies have launched lobbying campaigns and court cases, put sales targets on hold and threatened to launch their own unlicensed products to compete.
Tobacco companies have already announced plans to launch new products following the "enforcement discretion" policy.
The letters were signed by Democratic senators Durbin of Illinois, Warren and Edward Markey of Massachusetts, Jeff Merkley of Oregon, Richard Blumenthal of Connecticut and Jack Reed of Rhode Island.
($1 = 0.7435 pound)
Reporting by Emma Rumney in London; Editing by Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Key Takeaways MAMA is set to report Q1 FY27 on June 8; revenues are estimated at $51.8M, up 46.9% YoY. MAMA leans on distribution gains at Walmart, Target and Food Lion, plus deeper retail penetration. MAMA advances Crown 1 synergies, but commodity and freight inflation may pressure profitability. Mama's Creations, Inc. (MAMA - Free Report) is likely to witness top-line growth when it reports first-quarter fiscal 2027 earnings on June 8, 2026. The Zacks Consensus Estimate for revenues is pegged at $51.8 million, indicating an increase of 46.9% from the prior-year quarter’s reported figure.
The consensus mark for earnings has remained unchanged over the past 30 days at 3 cents a share, which is in line with the year-ago period. MAMA has a trailing four-quarter earnings surprise of 125%, on average.
Factors Likely to Influence MAMA’s Upcoming ResultsMama’s Creations is likely to have benefited from continued distribution gains and deeper penetration across key retail accounts in the first quarter of fiscal 2027. The company entered the quarter with recent placement wins at major national retailers, including Walmart, Target and Food Lion, while management remained focused on expanding products carried by existing customers. Growing shelf presence, broader geographic reach and increasing branded placements are expected to have supported sales momentum.
Another key driver is expected to be the ongoing integration of the Crown 1 acquisition. Management has highlighted progress in centralizing procurement and logistics, optimizing production across its manufacturing network and realizing operational synergies. Cross-selling opportunities between MAMA’s legacy customer base and Crown 1’s premium accounts have also started to gain traction, creating additional avenues for growth. These efforts support the company’s strategy of becoming a one-stop-shop provider of fresh prepared foods.
Mama’s Creations is also benefiting from favorable consumer trends, with shoppers increasingly seeking fresh, convenient and protein-focused meal solutions. Product innovation, including new prepared-food offerings and No Antibiotics Ever chicken products, along with expanded marketing and promotional initiatives, is likely to have supported customer acquisition and product velocities.
On the downside, the quarter may have been affected by inflationary pressures in key commodity and freight markets. Although management has implemented pricing actions, commodity contracts and operational initiatives to offset these headwinds, cost inflation and ongoing optimization efforts related to the Crown 1 integration may have created some near-term pressure on profitability.
Q1 Earnings Whispers for MAMAOur proven model doesn’t conclusively predict an earnings beat for Mama's Creations this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Mama's Creations currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable CombinationHere are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
Altria Group, Inc. (MO - Free Report) currently has an Earnings ESP of +2.72% and a Zacks Rank of 2. The Zacks Consensus Estimate for its upcoming quarter’s revenues is pegged at $5.35 billion, indicating a 1.1% rise from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Altria’s earnings is pegged at $1.48 per share, implying 2.8% growth from the year-ago quarter. MO delivered a trailing four-quarter earnings surprise of 2.9%, on average.
Darling Ingredients (DAR - Free Report) currently has an Earnings ESP of +22.16% and a Zacks Rank #3. The consensus estimate for quarterly revenues is pegged at $1.73 billion, which indicates an increase of 17.1% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Darling Ingredients’ upcoming quarter’s earnings per share is pegged at $1.20, calling for a substantial jump from the year-ago period’s figure of 9 cents. DAR delivered a trailing four-quarter earnings surprise of 16.1%, on average.
Albertsons Companies (ACI - Free Report) currently has an Earnings ESP of +14.25% and a Zacks Rank of 3. The consensus estimate for the quarterly revenues is pinned at $24.82 billion, which indicates a 0.3% dip from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Albertsons’ upcoming quarter’s EPS is pegged at 55 cents, which is in line with the year-ago period figure. ACI delivered a trailing four-quarter earnings surprise of 8.9%, on average.
In the latest trading session, Altria (MO - Free Report) closed at $72.19, marking a +2.25% move from the previous day. The stock's change was more than the S&P 500's daily loss of 2.65%. Elsewhere, the Dow saw a downswing of 1.35%, while the tech-heavy Nasdaq depreciated by 4.18%.
Shares of the owner of Philip Morris USA, the nation's largest cigarette maker witnessed a gain of 2.26% over the previous month, beating the performance of the Consumer Staples sector with its loss of 0.58%, and underperforming the S&P 500's gain of 5.47%.
The investment community will be paying close attention to the earnings performance of Altria in its upcoming release. The company is predicted to post an EPS of $1.48, indicating a 2.78% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $5.35 billion, showing a 1.06% escalation compared to the year-ago quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.68 per share and revenue of $20.53 billion. These totals would mark changes of +4.8% and +1.96%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Altria. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.12% increase. Altria currently has a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that Altria has a Forward P/E ratio of 12.43 right now. This indicates no noticeable deviation in contrast to its industry's Forward P/E of 12.43.
Investors should also note that MO has a PEG ratio of 2.64 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Tobacco industry was having an average PEG ratio of 2.02.
The Tobacco industry is part of the Consumer Staples sector. At present, this industry carries a Zacks Industry Rank of 205, placing it within the bottom 16% of over 250 industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow MO in the coming trading sessions, be sure to utilize Zacks.com.
Altria (MO - Free Report) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, MO broke through the 20-day moving average, which suggests a short-term bullish trend.
The 20-day simple moving average is a well-liked trading tool because it provides a look back at a stock's price over a 20-day period. Additionally, short-term traders find this SMA very beneficial, as it smooths out short-term price trends and shows more trend reversal signals than longer-term moving averages.
Like other SMAs, if a stock's price is moving above the 20-day, the trend is considered positive. When the price falls below the moving average, it can signal a downward trend.
Over the past four weeks, MO has gained 6%. The company is currently ranked a Zacks Rank #3 (Hold), another strong indication the stock could move even higher.
Looking at MO's earnings estimate revisions, investors will be even more convinced of the bullish uptrend. There have been 5 revisions higher for the current fiscal year compared to none lower, and the consensus estimate has moved up as well.
Investors may want to watch MO for more gains in the near future given the company's key technical level and positive earnings estimate revisions.
Ten thousand dollars a month in dividend income works out to $120,000 per year. That is enough to cover the rent on a luxury waterfront condo in Miami Beach, one of the most expensive rental markets in the country. The math that gets you there is simple: $120,000 divided by your portfolio yield equals the capital required. The interesting part is not the calculation itself, but the tradeoffs investors make at each point along the yield curve.
The Conservative Tier: 3% to 4% Yield This is the dividend-growth lane. At 3% to 4%, replacing $120,000 of income takes roughly $3.0 million to $4.0 million in capital. Specifically: $120,000 divided by 0.035 is about $3,428,000. At 0.04 it is $3,000,000.
The vehicles here are broad dividend-growth ETFs and Aristocrat-style blue chips. Johnson & Johnson (NYSE:JNJ | JNJ Price Prediction) just raised its quarterly payout to $1.34, extending 64 consecutive years of increases, and yields around 2.3%. Procter & Gamble (NYSE:PG) has paid dividends since 1890 and yields 2.9%. Coca-Cola (NYSE:KO) yields 2.6% and just lifted its quarterly to $0.53. The Schwab U.S. Dividend Equity ETF (SCHD) pulls the average up, charges 0.06%, and holds $71.6 billion.
The tradeoff: highest capital requirement, lowest current yield, but the income line compounds. JNJ’s annual payout has gone from $1.09 in 1999 to $5.20 in 2025. That is the engine that does the heavy lifting over a 20-year retirement.
The Moderate Tier: 5% to 7% Yield Capital required drops to roughly $1.7 million to $2.4 million. At 6%, $120,000 divided by 0.06 equals $2,000,000. At 7%, about $1,714,000.
The menu here is high-yield equity, REITs, preferred-share funds, and covered-call ETFs. Altria (NYSE:MO) anchors the category at a 6.1% yield with a $1.06 quarterly payout and a forward P/E of 12. Pair that with REIT funds, preferred-share funds, or equity-income covered-call products to fill out the tier.
You buy more current income for less capital. You give up most of the dividend-growth compounding, and covered-call sleeves cap your equity upside in a strong market.
The Aggressive Tier: 8% to 14% Yield This is where the capital requirement collapses to $857,000 to $1.5 million. At 10%, $120,000 divided by 0.10 is $1,200,000. At 12%, exactly $1,000,000.
Business development companies, mortgage REITs, leveraged covered-call funds, and high-yield bond funds populate this tier. Ares Capital (ARCC) yields 10.1% on a $0.48 quarterly distribution and trades near book value at $19.59 NAV. The catch: ARCC’s NAV slipped from $19.94 last quarter, and the shares are down about 4% year to date. That is the signature of the tier. The income shows up, the principal does not always.
The Compounding Effect Many Investors Underestimate A conservative $4 million portfolio generating $120,000 in annual income today may not look exciting at first glance. However, if those dividends grow at 6% to 9% per year, the income stream can exceed $250,000 annually within about 12 years, even before accounting for any share-price appreciation. By contrast, an aggressive portfolio designed to maximize current yield may start with less capital and higher payouts, but income growth is often limited. As distributions are reduced and net asset values decline, the long-term income advantage can narrow significantly.
Why Taxes Matter as Much as Yield Once dividend income reaches $120,000 per year, taxes become a major factor in portfolio construction. Qualified dividends from companies such as Johnson & Johnson, Procter & Gamble, Coca-Cola, and many distributions from SCHD are generally taxed at long-term capital gains rates rather than ordinary income rates. Higher-yield investments, including many business development companies, mortgage REITs, and covered-call funds, often generate distributions taxed as ordinary income. That difference can have a meaningful impact on the amount of income investors actually keep. With the 10-year Treasury yielding around 4.5%, investors should evaluate not only the size of a portfolio’s yield, but also how much of that income remains after taxes.
Three Moves Before You Commit Track your actual after-tax spending for 12 months. A household netting $120,000 often grosses far less than its salary suggests, which can shrink the required capital by hundreds of thousands. Hold ordinary-income payers (BDCs, mREITs, covered-call ETFs) inside an IRA or 401(k). Keep qualified-dividend stocks in the taxable account where the 15% rate applies. Compare a 10-year total return for a 3.5% dividend-growth fund against a 10% high-yield fund using their actual distribution histories. The growth side’s compounding usually wins past year seven, and that is the decision you are really making.
Altria (MO - Free Report) closed at $71.41 in the latest trading session, marking a -2.35% move from the prior day. This move lagged the S&P 500's daily gain of 1.75%. At the same time, the Dow added 1.86%, and the tech-heavy Nasdaq gained 2.54%.
Prior to today's trading, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had gained 2.22% outpaced the Consumer Staples sector's gain of 1.72% and the S&P 500's loss of 1.63%.
The upcoming earnings release of Altria will be of great interest to investors. The company's earnings report is expected on July 30, 2026. The company is expected to report EPS of $1.48, up 2.78% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.35 billion, up 1.06% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $5.68 per share and revenue of $20.53 billion, indicating changes of +4.8% and +1.96%, respectively, compared to the previous year.
Investors might also notice recent changes to analyst estimates for Altria. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, there's been a 0.12% rise in the Zacks Consensus EPS estimate. At present, Altria boasts a Zacks Rank of #2 (Buy).
In terms of valuation, Altria is currently trading at a Forward P/E ratio of 12.87. This valuation marks no noticeable deviation compared to its industry average Forward P/E of 12.87.
We can additionally observe that MO currently boasts a PEG ratio of 2.74. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Tobacco industry stood at 2.11 at the close of the market yesterday.
The Tobacco industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 216, which puts it in the bottom 12% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow MO in the coming trading sessions, be sure to utilize Zacks.com.
Altria Group (NYSE:MO | MO Price Prediction) at $73.13 looks like a name to hold rather than add to. The yield is too rich to abandon, but the entry point is too high to fund with fresh capital while the U.S. consumer wobbles.
Altria sells Marlboro, Black & Mild cigars, Copenhagen and Skoal smokeless tobacco, on! nicotine pouches, and the impaired NJOY e-vapor unit. Shares have climbed 33.68% over the past year and 28.94% year to date, brushing a 52-week high of $74.56 and pushing past Wall Street consensus.
A 33% Rally Into a Slowing Consumer The personal savings rate fell to 3.7% in Q1 2026 from 5.2% a year earlier, and aggregate personal saving has contracted 35.1% since early 2024. Premium tobacco pricing power depends on a consumer with less cushion.
Why the Yield Bulls Keep Adding Altria delivered 7.3% adjusted EPS growth in Q1 2026, smokeable margins expanded to 65.1%, and management reaffirmed full-year 2026 adjusted EPS of $5.56 to $5.72. The annualized dividend sits at $4.24 after the 60th increase in 56 years, good for a 5.81% yield.
Altria returned $8 billion to shareholders in 2025 and has $720 million left on the buyback through year-end. With a 0.501 beta and a forward P/E of 13, this is the kind of low-volatility income story dividend investors hoard. Reddit’s r/dividendinvesting community holds a steady bullish 71 sentiment score on the name.
The Volume Story That Won’t Quit The core business is shrinking. Domestic cigarette industry volumes fell roughly 5% in Q1 2026 after a 10.0% drop for full-year 2025. Marlboro retail share slipped 1.4 points to 39.7%, and the on! pouch share collapsed 4.2 points to 13.4% as competitors captured growth in the one category that should be a tailwind.
Discount cigarettes captured 33.3% of industry share, up 2.4 points, evidence of trade-down. NJOY ACE is sidelined by an ITC exclusion order after $2.2 billion in e-vapor impairments. Stockholders’ equity is negative $3.2 billion, and a CEO transition looms.
Why Patience Beats Conviction Here Pricing power and buybacks can carry adjusted EPS to the 2.5% to 5.5% growth band guidance, but a Q1 revenue beat propped up by 610 million contract-manufactured export sticks is not organic strength. Collect the dividend, watch H2 2026 volume trends, and reserve fresh capital for a deeper pullback.
What the Numbers Show Altria trades at $73.13 against a Wall Street consensus target of $70.36, implying roughly 3.7% downside. The trailing P/E is 15 and the forward multiple is 13, both modest but stretched against single-digit EPS growth.
The YTD return of 28.94% dwarfs the S&P 500’s roughly 6% YTD gain. Of 14 analysts covering the stock:
Buy: 5 Hold: 7 Sell: 1 Strong Sell: 1 The Verdict on Altria at $73 At $73, Altria is a Hold. The dividend is intact and growing, the buyback is funded, and management has reaffirmed guidance. None of that justifies a fresh entry above analyst consensus while Marlboro and on! both cede share and the savings rate craters. Existing holders are paid 5.81% to wait.
Conditions that would flip this to a Buy: a pullback toward the $64.46 200-day moving average, stabilization in Marlboro retail share, and evidence that on! is reclaiming pouch category points. Conditions that would flip it to a Sell: a guidance cut, a dividend coverage scare, or a 2027 outlook that fails to clear mid-single-digit EPS growth.
Watch the Q2 earnings report for organic smokeable volume excluding the export contract boost, the on! share line, and incoming CEO commentary on capital allocation discipline given negative $3.2 billion in equity.
At $73, Altria pays you to wait, but it does not pay you enough to chase.
