We recently published a list of Top 10 High Dividend Yielding Consumer Defensive Stocks To Buy. In this article, we are going to take a look at where Altria Group, Inc. (NYSE:MO) stands against other top high dividend yielding consumer defensive stocks to buy.
Consumer defensive stocks tend to perform well in uncertain times because they sell essential items such as household products, healthcare items, and food and beverages, among others. Such companies also tend to have a strong pricing power which helps them to easily pass on increasing costs to consumers.
The US market continues to struggle due to concerns over tariffs, geopolitical issues, and politics. In such times, consumer defensive stocks offer a way to protect one’s portfolio from this uncertainty.
When such shares also offer a high dividend yield, it performs a killer combination, loved by defensive investors looking to park their money for reliable passive income. We therefore decided to come up with a list of the top 10 high-dividend-yielding consumer defensive stocks.
To come up with the list of top 10 high-dividend consumer defensive stocks, we only considered stocks from the consumer defensive sector with a market cap of at least $10 billion and a dividend yield of at least 4%.
A close-up of an assembly line with a blend of tobacco products.
Altria Group, Inc. (NYSE:MO)
Altria Group, Inc. is a manufacturer and distributor of oral tobacco and smokeable products. It offers its products under different brand names. The company distributes its products to large retail organizations like chain stores and distributors. The stock’s dividend yield is currently above 7%, offering much higher returns than fixed income assets.
Altria’s latest quarterly earnings surpassed market expectations as the company registered a strong double beat. Revenue growth was recorded at 1.63% YoY while the EPS and gross margins also improved.
At the end of FY2024, the company had a stable financial position, ending with a $3.13 billion total cash balance, higher than the previous quarter. It also managed to improve its net debt position, further adding to the sustainability of its dividend.
Altria also announced a new share buyback program worth $1 billion in 2025, highlighting the company’s focus on shareholder returns. Management expects non-GAAP EPS to grow in a range between 2% to 5% going forward, a rate that should help it sustain an extraordinarily high yield. In case investors are curious, the current yield is still below the 5-year average yield of 7.9%!
Overall, MO ranks 2nd on our list of top high dividend yielding consumer defensive stocks to buy. While we acknowledge the potential of MO as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as MO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.