Altria Group, Inc. (NYSE: MO) is an attractive stock to own for its reliable dividend, which the company has increased for decades. This month, Altria announced a 4.1% increase in its regular quarterly dividend, raising the payout to $1.02 per share, up from the previous $0.98 per share. The new dividend will be payable on October 10.
At a share price of around $52, that means investors who buy shares of the tobacco company can expect to collect a yield of around 7.8%, which is far higher than the S&P 500 average of 1.3%. To receive $1,000 in annual dividends from Altria, you would need to invest approximately $13,000 into the stock today.
This is now the 59th time in the past 55 years where Altria has raised its dividend, making it an alluring option for income investors.
The problem, however, is that Altria hasn’t been a terribly great investment overall. It has been struggling to grow its sales, even as it has been launching healthier products. Last year, the company’s revenue totaled $20.5 billion, which marks the second straight year where its top line has declined.
Investors haven’t been eager to buy up the stock on its concerning growth prospects, either. In 10 years, the stock is up just 23%. When you factor in its dividend, then its total returns are far higher at around 130%. But that’s still far below the S&P 500’s total returns of more than 230%.
While Altria may be a tempting dividend stock to own for its high yield, it’s an investment that investors will need to be careful with as it is not as safe a stock to own as it was in years past.
