“Vice stocks” have long been attractive to investors, whether they personally choose to light up, imbibe or not. In spite of growing worldwide pressure (especially for the tobacco industry), this is one of the most recession-resistant sectors available. Typically offering growth and big dividends, this is an excellent holding to have in your portfolio. Today, we’ll look at one of the sector’s heavyweights, Altria (MO), and see if this stock is burning hot, or if it has gone up in flames.
Solid Performance from the Leader
Holding around half the US market share for tobacco products, Altria Group is the country’s biggest, and the world’s third largest manufacturer in the sector. Altria has a capitalization of over $61 billion, and it is known for being a very good mixed growth and dividend stock. Currently paying a $1.64 dividend for a 5.5% yield, the company was a dividend aristocrat until its spin-off of Kraft Foods (KFT) in 2007 and Philip Morris International (PM) in 2008 forced a dividend decrease.
In addition to its handsome dividends, Altria has experienced very good growth in share price as well. Over the past year, the stock has increased more than 18%. It is currently trading around 10% over its 200-day moving average, a position it has held since September, 2011. Although its year-to-year earnings dropped nearly 9%, the company actually saw a quarterly revenue increase of five percent.