Introducing Valuation Models! 
Key Takeaways:
- Altria offers a 7% dividend yield, well above market averages, with a stable 78% payout ratio and gradual dividend growth projected through 2027.
- Revenue is expected to decline by 0.5% annually due to falling cigarette volumes, but pricing power and strong margins help support earnings stability.
- TIKR’s valuation model suggests modest upside with a $73 target price by 2027, while the dividend remains the core driver of total returns.
Altria has built a reputation as one of the most dependable dividend payers in the S&P 500.
It owns some of the biggest tobacco brands, including Marlboro, and consistently delivers earnings through strong pricing power, wide margins, and tight cost controls.
But the long-term picture is a bit more complicated. The U.S. cigarette market is steadily shrinking, and even though Altria keeps raising prices to make up for lower volumes, overall revenue is expected to dip slightly in the years ahead.
Its smokeless and heated tobacco products are promising, but they haven’t quite taken off yet.
Still, that hasn’t stopped Altria from taking care of its shareholders.
With one of the highest dividend yields you’ll find and a stable payout policy, it remains a go-to choice for income-focused investors.
Analysts Think the Stock is Undervalued Today
Altria shares currently trade around $60/share, but based on TIKR’s guided valuation model, the stock could reach ~$73/share by 2027.
That implies a 23% total return, or about 8.7% annually, assuming slight earnings growth and continued dividend growth.
It’s important to note that this Valuation Model does include Altria’s dividend payments, which means dividends will likely drive the bulk of returns for investors.
Today, the stock trades at just 9.3x forward earnings, below its 5-year average of 9.5x and far below its 10-year average of 12.9x. Unless the company can restart growth or accelerate the adoption of reduced-risk products, investor sentiment may stay muted.
Value any stock in less than 60 seconds with TIKR (It’s free) >>>
A 7% Dividend Yield Near the Bottom of Its Historical Range
Altria’s forward dividend yield sits around 7%, which is still among the highest in the S&P 500, but below its 5-year average of 8.13%.
The stock has traded sideways, but steady dividend hikes have helped shareholders compound returns over time.
With the yield near the low end of its 5-year range, the stock may already reflect some optimism. But if earnings remain stable and the payout continues to grow, Altria could still offer strong total returns going forward.
Find high-quality dividend stocks that look even better than Altria today. (It’s free) >>>
Payout Looks Secure While Revenue Pressure Persists
Altria is expected to earn $5.38 per share in 2025, with EPS projected to grow to $5.73 by 2027. That works out to a compound annual growth rate (CAGR) of about 3.2%. Over the same period, the dividend is expected to rise from $4.17 to $4.48 per share, growing slightly faster at 3.6% per year. The payout ratio should stay steady around 78%, in line with Altria’s long-standing capital return strategy.
Revenue, however, is forecast to decline by about 0.5% annually through 2027, driven by falling cigarette volumes in the U.S. Altria has managed to offset much of this pressure through price increases, but the long-term headwinds in the combustible segment are still significant.
That’s why the company is leaning into its reduced-risk product portfolio, including the oral nicotine brand on! and the heated tobacco system IQOS. Altria regains full U.S. commercialization rights to IQOS in 2024, which could give it more control and upside in the years ahead.
Even so, it will likely take time for these products to scale and contribute meaningfully to revenue. In the near term, topline growth may stay muted, and the dividend will remain the core reason most investors own the stock.
Despite the challenges, Altria has raised its dividend 59 times in the past 55 years and delivered steady earnings through a wide range of market conditions. If products like IQOS and on! begin to gain meaningful traction, Altria could eventually stabilize revenue and return to modest growth.
For now, it’s still one of the most dependable income stocks in the market, backed by durable cash flow and a management team committed to rewarding shareholders.
See Altria’s full growth forecast and analyst estimates. (It’s free) >>>
Wall Street Analysts Are Bullish on These 5 Undervalued Compounders With Market-Beating Potential
TIKR just released a new free report on 5 compounders that appear undervalued, have beaten the market in the past, and could continue to outperform on a 1-5 year timeline based on analysts’ estimates.
Inside, you’ll get a breakdown of 5 high-quality businesses with:
- Strong revenue growth and durable competitive advantages
- Attractive valuations based on forward earnings and expected earnings growth
- Long-term upside potential backed by analyst forecasts and TIKR’s valuation models
These are the kinds of stocks that can deliver massive long-term returns, especially if you catch them while they’re still trading at a discount.
Whether you’re a long-term investor or just looking for great businesses trading below fair value, this report will help you zero in on high-upside opportunities.
Click here to sign up for TIKR and get our full report on 5 undervalued compounders completely free.
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
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 stocks mentioned. Thank you for reading, and happy investing!
