Altria Group (
), the largest U.S. tobacco producer, has retaken its 50-day
moving average as it works on a possible new base.
The maker of Marlboro cigarettes has battled back despite head
winds such as smoking-related lawsuits, falling cigarette sales
and a disappointing Q2 earnings report.
The stock is up 10% this year, easily outpacing the S&P
500, and is just 3% below a new high.
Furthermore, Altria has boosted its dividend 47 times in the
past 44 years. The last increase was declared in August 2013, a
9% hike to 48 cents a share. The annual dividend yield is a
little under 5% at the current share price, far above the S&P
500 average of 1.94%.
Altria last month reported that Q2 profit rose 5% to 65 cents
a share, just below analysts' expectations. Revenue slipped 1% to
The company is trying to offset a long-term slide in cigarette
sales by raising prices and expanding smokeless offerings such as
chewing tobacco and electronic cigarettes. E-cigarettes are seen
as a safer alternative to tobacco, but they're also coming under
On July 19, Altria rivalReynolds American (
) was ordered to pay $23.5 billion in damages to the widow of a
smoker who died from lung cancer. The amount is expected to be
reduced on appeal.
The verdict came days after Reynolds announced plans to
) to create the second-largest U.S. tobacco company behind
Yet all three stocks reacted negatively to the takeover news,
and both Reynolds and Lorillard remain below their 50-day
Despite the head winds, all three companies remain boast
unusually stable profits. Altria has a five-year Earnings
Stability Factor of 1 on a scale of zero (most stable) to 99
(most volatile). Its annual pretax margin is also strong and
rising, boding well for future dividend hikes.