Key Takeaways
- AbbVie lowered its 2026 adjusted EPS guidance to $13.76 to $13.96 on Oct. 5, reflecting $1.25 billion of acquired IPR&D and milestone expense.
- Altria yields 6.2% against AbbVie’s 2.6%, while AbbVie raised its dividend faster from fiscal 2020 to fiscal 2025: 6.6% a year against Altria’s 4.1%.
- AbbVie’s dividend used 66% of free cash flow over the 12 months to June 30, 2026, against 78% for Altria.
- AbbVie’s payout ratio climbed from 41% in fiscal 2022 to 65% in fiscal 2025, while Altria’s stayed between 75% and 82% from fiscal 2021 to fiscal 2025.
AbbVie (ABBV) lowered its 2026 earnings guidance in a filing on Oct. 5. Adjusted EPS is now expected at $13.76 to $13.96, down from $13.87 to $14.07, reflecting $1.25 billion of acquired IPR&D and milestones expense for the year.
That’s the price of buying its next pipeline. Altria Group (MO) offers the opposite trade. In July, it narrowed its 2026 outlook to 3.5% to 5.5% adjusted EPS growth, and its yield is more than twice AbbVie’s.
If you’re putting $10,000 to work for the next decade, which one do you hold?
| Metric | AbbVie (ABBV) | Altria Group (MO) |
|---|---|---|
| Dividend yield | 2.6% | 6.2% |
| Dividend growth, fiscal 2020 to fiscal 2025 | 6.6% a year | 4.1% a year |
| Cash dividend payout ratio (TTM to June 30, 2026) | 66% | 78% |
| Net debt/EBITDA (LTM) | 2.06x | 1.41x |
| Interest coverage (LTM) | 7.85x | 13.27x |
| Forward P/E (NTM) | 18.0x | 12.4x |
Source: TIKR, Oct. 9, 2026.
AbbVie’s new drugs are carrying the load
In the second quarter of 2026, Skyrizi, Rinvoq, and AbbVie’s neuroscience drugs each grew more than 20%. Those drugs are outrunning Humira, whose global sales fell 36.1% operationally in the quarter as biosimilars took share.
The dividend used 66% of free cash flow over the 12 months to June 30, 2026. That’s a well-covered figure on its own, but the trend is moving the wrong way…
AbbVie’s free cash flow peaked at $24.3 billion in fiscal 2022 and came in at $17.8 billion in fiscal 2025, while dividends paid rose from $10.0 billion to $11.7 billion over the same stretch. Squeezed from both sides, the payout ratio climbed from 41% to 65%.
The cushion behind the dividend has shrunk every year since fiscal 2022, and debt adds to the risk. Net debt is 2.06x EBITDA, and CFO Scott Reents said AbbVie is “committed to achieving a net leverage ratio of 2x within 2 to 3 years following the deal close” on its planned Apogee acquisition.
Today, a 2.6% yield means $10,000 pays $260 a year. Grow that at 6.6% annually, and it becomes about $461 in year 10, a 4.6% yield on your original cash, and about $3,519 over the decade. On its own, that’s not a big check, so you’d also be counting on capital appreciation.
Altria’s slow, steady machine
Altria is almost the mirror image of AbbVie, with steady cash flow on one hand and a core business that’s slowly shrinking on the other.
Altria’s domestic cigarette shipments are falling right along with the rest of the industry, and nicotine pouches are where the growth is, led by the national rollout of on! PLUS. Across the whole business, revenue net of excise taxes still rose 1.2% in the second quarter of 2026, and adjusted EPS rose 2.8% to $1.48.
That’s slow growth, but the dividend mostly needs steady cash…
Free cash flow rose from $8.15 billion in fiscal 2020 to $9.07 billion in fiscal 2025, and dividends paid rose from $6.29 billion to $6.96 billion. The payout ratio stayed between 75% and 82% every year from fiscal 2021 to fiscal 2025. At 78% over the 12 months to June 30, 2026, it’s high, but in line with the past five years.
At a 6.2% yield, $10,000 pays $620 a year today. At 4.1% annual growth, that becomes about $891 in year 10, an 8.9% yield on your original cash, and about $7,484 over the decade. The main risk is that cigarette volumes keep falling faster than pouches can make up the difference.
So which dividend wins?
I’d hold Altria for the next 10 years.
The income gap is too wide to ignore. Over the decade, $10,000 in Altria pays about $7,484, against about $3,519 for AbbVie. At these rates, AbbVie’s yearly income wouldn’t pass Altria’s for more than 30 years.
Altria’s pace also looks like one it can keep up. Its payout ratio has stayed in the same range for five years, and its 3.5% to 5.5% EPS growth guidance for 2026 lines up with 4.1% annual raises. Altria also carries less debt and trades at 12.4x forward earnings, against 18.0x for AbbVie.
AbbVie’s dividend is still safe, and its growth drugs are real. A 66% payout ratio leaves more room than Altria’s 78%, and AbbVie has raised its dividend faster. The trouble is that the room has been shrinking since fiscal 2022 while debt is set to rise, so over 10 years Altria simply pays you more.
Of course, management says industry cigarette declines have moderated for four quarters in a row. If that reverses, Altria’s raises get harder to fund.
So what is Altria stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Altria could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
