Image Source: Unsplash

Income investors looking for a high dividend stock for 2025 should consider Altria Group Inc. (MO). The company has a long history of reliable dividend hikes. It has increased its dividend for 54 consecutive years, qualifying it for the exclusive list of Dividend Kings, highlights Bob Ciura, contributing editor at Sure Dividend.

Of course, there are challenges currently facing Altria. The company has been hit hard by the declining smoking rate in the US. This has taken a steep toll on the company’s growth. Fortunately, the company has a plan to continue growing earnings in the years ahead.

Altria is a consumer staples giant with a diversified product portfolio. It sells the Marlboro cigarette brand in the US and a number of other non-smokeable brands. It also has a 10% ownership stake in global beer giant Anheuser Busch InBev.

Altria reported solid third-quarter results, driven by the resilience of its smokable products and the continued market momentum of the “on!” nicotine pouch brand. The company’s Q3 revenue was $5.34 billion, a 1.3% year-over-year increase, with adjusted earnings per share reaching $1.38, exceeding expectations by $0.03.

In the NJOY segment, consumables shipments rose by 15.6% and devices by 100% year-over-year, reflecting strong demand in the non-smokable products segment. The NJOY brand captured a 6.2% share in the US convenience market.

Additional EPS growth can be achieved through cost reductions and share repurchases. Altria recently announced its Optimize & Accelerate initiative aimed at modernizing processes, with projected cumulative savings of $600 million over the next five years. Furthermore, in its most recent quarter, Altria repurchased 13.5 million shares, spending $680 million.

At the same time, Altria continues to invest in new products. Altria invested billions of dollars in Canadian marijuana producer Cronos Group for a 55% equity stake (including warrants) and a 35% equity stake in e-vapor manufacturer Juul Labs.

Altria stock recently had a high dividend yield of 7.3%. It ranks very highly in terms of dividend safety because the company has tremendous competitive advantages. It operates in a highly regulated industry, which virtually eliminates the threat of new competition. Altria also enjoys strong brands across its product portfolio, including the No. 1 cigarette brand.

As a result, it has pricing power and brand loyalty. In addition, tobacco companies enjoy low manufacturing and distribution costs, thanks to their economies of scale. This has fueled Altria’s tremendous dividend growth.

About the Author

Bob Ciura is currently senior vice president of Sure Dividend, and has been in that role since 2016. Previously, he was an independent equity analyst for a variety of investment services, including The Motley Fool and Seeking Alpha. Mr. Ciura has over five years of experience in financial modeling and equity valuation. He has a Bachelor's degree in finance from DePaul University, and an MBA from the University of Notre Dame.

More By This Author: