Want a Lifetime of Passive Income? Buy Altria Stock in July and Never Sell.

Altria (NYSE: MO), the largest baccy institution successful America, mightiness not look similar a reliable semipermanent investment. It owns Marlboro, the apical cigaret marque successful the country, but big smoking rates successful the U.S. person steadily declined implicit the past six decades. It besides spun disconnected its higher-growth overseas concern as Philip Morris International (NYSE: PM) successful 2008.

Yet implicit the past 5 years, Altria's banal has inactive rallied 56% and generated a full instrumentality of 129% aft reinvesting dividends. It's besides raised its dividend 60 times implicit the past 56 years, making it a Dividend King that has hiked its payout for astatine slightest 50 consecutive years.

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It pays a guardant dividend output of 5.8%, compared to the 10-Year Treasury's 4.6% yield, and it spent lone 81% of its escaped currency travel (FCF) connected dividends implicit the past 12 months. Let maine explicate wherefore those dividends are sustainable, wherefore its halfway concern is inactive growing, and wherefore it's a large income banal to bargain this period arsenic immoderate investors shun stocks during the dilatory summertime months.

Why is Altria's concern sustainable?

For decades, Altria raised its cigaret prices, chopped costs, and repurchased much shares to turn EPS adjacent arsenic gross maturation slowed. It expanded its portfolio of smoke-free products -- including e-cigarettes, nicotine pouches, and snus -- to curb its dependence connected smokeable products. That's wherefore it acquired the apical e-cigarette brand, NJOY, successful 2023. The enlargement of its On! nicotine pouches has besides been expanding its stock of the oral baccy market.

By 2028, Altria aims to make astatine slightest $5 cardinal successful smoke-free revenue, equivalent to 24% of its projected sales, to offset declining cigaret shipments. It besides bought backmost 9% of its shares implicit the past 5 years, and those buybacks volition proceed for the foreseeable future.

Altria is people insulated from tariffs and commercialized wars, since it produces astir each of its products wrong the United States and sells them here. Its smoke-free portfolio could besides payment from an FDA crackdown connected the market's smaller alternate nicotine products.

Analysts expect Altria's EPS to turn astatine a 13% CAGR from 2025 to 2028 arsenic those catalysts footwear in. That's wherefore its banal inactive looks similar a bargain astatine 13 times this year's earnings, and wherefore it volition stay an charismatic concern adjacent if the broader marketplace pulls back. As galore investors "sell successful May and spell away" for the summer, I'm inactive consenting to bargain much Altria shares.