By Bob Ciura:
Tobacco stocks like Altria Group (NYSE:MO) are well-known and extremely well-regarded for their income potential. Altria has been one of the premier dividend stocks to own over the past several decades. It has a remarkable ability to pay a high yield, and also provide regular dividend increases that have significantly increased shareholder wealth over this time. To that end, Altria very recently increased its dividend by 8%, representing the 48th dividend raise in the past 45 years.
Today, however, many investors and analysts fret about Altria’s ability to keep growing. This is because of the declining smoking rate in the United States. As the bear case contends, it’s illogical to view Altria’s past as prologue, because the growth rates it achieved for the past several decades won’t be possible going forward.
This may be true, but only to a point. Rest assured that Altria management is fully aware of the