Dividend stocks provide steady passive income and long-term capital appreciation through dividend reinvestment and compounding. Altria has increased its payout for 56 consecutive years and now pays $1.02 per share quarterly, yielding about 6%, well above the S&P 500 average. U.S. cigarette volumes have roughly halved over a decade, and Marlboro volumes fell 10.2% in 2024, but Marlboro still holds a 41.3% U.S. market share. Cigarette adjusted operating income margins reached 61.6% in 2024, and smokeable products generated 88% of last quarter's net revenue. Altria's move into reduced-risk products produced costly setbacks, including a $12.8 billion Juul investment written down to zero by 2023.
Dividend stocks are a cornerstone of wealth-building, offering investors a steady stream of passive income and the potential for long-term capital appreciation. By reinvesting dividends, compounding returns can transform modest investments into substantial nest eggs over time. Tobacco giant Altria ( ) stands out as a premier dividend stock, having just raised its payout for an impressive 56 consecutive years, earning it Dividend King status.
The tobacco industry is undeniably in a secular decline, with U.S. cigarette consumption dropping from 250 billion sticks annually a decade ago to roughly half that today. Health awareness, regulatory pressures, and rising excise taxes have accelerated this trend, with Altria's Marlboro brand seeing a 10.2% volume decline in 2024 alone. Yet, nicotine's addictive nature keeps Altria exceptionally profitable. Its smokeable products segment, dominated by Marlboro's 41.3% U.S. market share, generated 88% of net revenue last quarter.
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