Use Altria's High Dividend For Retirement Portfolios

The stock price of Altria (MO) is down over 27% this year. This has clearly been a painful year for equity holders of this once-stable company. But continuing declines in smoking rates in the United States has sparked fears that there is no way Altria can continue its earnings growth over the long run.

The big drop in Altria’s stock price is the bad news, at least for current holders of the stock. But there is a lot of good news for those looking to invest in solid dividend-paying stocks: First and foremost, Altria’s current dividend yield is 5.9%.

It isn’t easy to find a 5.9% dividend yield from a company with a long history of never cutting its dividend. Also, Altria increased its dividend this year by 14% compared to 2017. For those looking for dividend income over the long-run, Altria could be the perfect fit.

How Altria Can Continue To Grow

The decline in U.S. smoking is definitely bad news for this company. But Altria understands they need to diversify and they have been making moves. They recently bought a $1.8 billion stake in Canadian marijuana company Cronos. Altria knows that the tide has turned for legalized marijuana both here in the U.S. and Canada, and they want to get on board early.

Altria is also in talks to take a stake in e-cigarette maker Juul Labs. Although cigarette smoking is way down in the U.S. over the past decade, e-cigarette use has accelerated, especially among younger people. Altria knows that and has been involved in the e-cigarette market for a while now.

Altria’s Dividend And Retirement Portfolios

For those looking to live off of income in retirement and not touch their principal, a stable of solid dividend payers is a must. Although interest rates have increased quite a bit this year, bond yields are still not high enough to generate the needed income in retirement for most people.

This is why investing in the best dividend payers for the long-run is so important. I want to show just how big the impact of a stock like Altria can be on retirement portfolios.

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