As of this writing, the company is on trial after being sued by the U. Altria claimed it acquired a stake in Juul based on its failure to create a satisfactory vaping product. Juul has also become something of litigation albatross for Altria. Thirty-eight other states have their own investigations into Juul, and settlements with those entities are not hard to imagine. The U. Food and Drug Administration has its own probe into Juul, too.
However, Altria is hardly on the ropes. The company manufactures nearly half of all cigarettes sold in the U. Its first-quarter gross profit saw a The company also Altria repurchased 6. This was mainly due to lower cigarette shipments as consumers are switching to smokeless options due to health concerns.
Revenue growth was driven by higher pricing of cigarettes and recent acquisitions. The decline in was driven by higher marketing investment behind non-combustible products.
Even in the absence of a partial impairment reversal, rising volume of smokeless products and higher pricing of cigarettes will drive margins higher. Thus, Altria is likely to perform better in the coming quarters and years, with a superior margin growth along with expansion of its top line.
Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently.
Walmart, the nation's largest retailer, said last week it was going to stop carrying e-cigarettes altogether amid heightened regulatory scrutiny. Shares of Altria initially gained but were down 2. The companies, which said in August they would discuss a possible all-stock merger of equals , now say they will focus on jointly launching IQOS, a heated tobacco product, in the United States. The IQOS device heats tobacco to release flavorful nicotine-containing tobacco vapor but without burning the tobacco.
Philip Morris is targeting 90 billion to billion shipments of heated tobacco units by Overall, revenue declined 4. Currently, Altria has a higher dividend yield of 8. Headwinds like regulatory pressure, decline in cigarette volumes, and the impact of travel restrictions due to COVID on duty-free sales continue to concern both Altria and Philip Morris. However, considering the potential upside over the next months and the higher dividend yield, Altria looks to be a better buy.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only.
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