1 Magnificent S&P 500 Dividend Stock Down 14% to Buy and Hold Forever

Published: Saturday, December 6, 2025 at 1:55 pm

Altria: A Dividend Stock in a Shifting Landscape

The S&P 500 has experienced a significant rally this year, approaching record highs. However, the index's performance has been largely driven by a handful of high-growth tech companies, often overshadowing other stocks. Amidst this environment, investors are seeking undervalued opportunities, particularly those offering attractive dividends.

One such stock is Altria, the largest tobacco company in the United States. Currently trading below its all-time high, Altria presents itself as a potential "buy and hold" dividend stock. The company, formerly known as Philip Morris, dominates the domestic cigarette market with its Marlboro brand. In 2008, Altria spun off its international business, Philip Morris International, to focus on its domestic market.

Despite declining smoking rates in the U.S., Altria has demonstrated resilience. While shipments of its smokeable products have decreased, the company has managed to grow revenue and earnings per share through price increases, cost-cutting measures, and share buybacks. Altria has also diversified its portfolio by expanding into smoke-free products, including e-cigarettes and nicotine pouches.

Looking ahead, Altria has several catalysts for growth. The acquisition of Njoy, a leading e-cigarette maker, is expected to contribute to earnings growth in the coming years. The company also plans to increase sales of its On nicotine pouches and heated tobacco products. Altria aims to generate a significant portion of its revenue from smoke-free products by 2028. Furthermore, the company is implementing a cost-saving initiative and has initiated a share buyback program.

Analysts anticipate continued earnings growth for Altria in the coming years. The stock's valuation appears attractive, and its high dividend yield provides a significant return for investors. Altria's low valuation and high dividend yield could attract defensive investors, particularly if the broader market experiences a downturn.

BNN's Perspective:

While the tobacco industry faces long-term challenges, Altria's strategic diversification and commitment to shareholder returns make it an interesting option for income-focused investors. However, investors should be aware of the inherent risks associated with the industry and conduct thorough due diligence before making any investment decisions.

Keywords: Altria, dividend stock, S&P 500, tobacco, Marlboro, Njoy, smoke-free products, earnings per share, dividend yield, undervalued, investment, buy and hold.

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