Altria (MO +1.95%) sells Marlboro cigarettes in the United States. It is one of the best-known brands in the world, at least among smokers. Add in Altria's steadily growing dividend and a 7.4% yield, and it would seem like this is a slam-dunk dividend stock for those looking to build a million-dollar portfolio. That's doubly true if you compound those dividends by reinvesting them.
There are just a couple of problems with Altria's story. Here's what you need to know before you buy this high-yield stock, thinking that it will help turn you into a millionaire.
Image source: Getty Images.
Altria's core is weak
Altria is classified as a consumer staples company. That is because it sells a relatively low-cost product that consumers purchase on a regular basis, regardless of economic or stock market fluctuations. There's a nuance here, however, because Altria doesn't sell life necessities like food and toiletries; it sells tobacco products.
Tobacco products are bought regularly because nicotine is addictive. This is where the problems start for Altria, because cigarettes are the primary way it provides nicotine to consumers. Smokable tobacco products account for nearly 90% of the company's revenues. Cigarettes account for just over 97% of its smokable tobacco product volumes.
Sure, it owns the most important cigarette brand in the U.S. market, with a 40% overall market share and a nearly 60% share of the premium market. But that positive has to be juxtaposed against the fact that Altria's business is centered around one product and, really, just one brand, since Marlboro accounts for roughly 88% of the company's cigarette sales.
Being what amounts to a one-trick pony isn't actually the bad news. Many companies excel in one area, resulting in vibrant and growing businesses. Altria's problem is that it is a one-trick pony with a business that is steadily shrinking.
The company sold 8.2% fewer cigarettes in the third quarter of 2025 than it did in the same stanza of 2024. Through the first nine months of 2025 volume fell 10.6%. That's a continuation of a long-term trend, with cigarette volume down 10.2% in 2024, 9.9% in 2023, and 9.7% in 2022.
Altria hasn't been able to solve the problem
It is pretty clear that Altria's core business is in decline. If this were any other consumer staples company, investors would likely be running for the hills. However, it still generates a substantial amount of cash flow and is using that cash to pay a large dividend. It has even been increasing its dividend despite the fundamental weaknesses of its business. That makes it easy for dividend lovers to overlook the very real business headwinds the company is facing.
That said, there's another reason to be worried here. Altria knows its cigarette business is in a cyclical decline as people either quit smoking or shift to alternative nicotine delivery systems. It has been reimagining its business to adjust. A big move was to spin off Philip Morris International, separating out the company's foreign operations from its domestic operations.
NYSE: MO
Key Data Points
That has proven to be a mistake as cigarette sales in foreign markets have held up better than cigarette sales in the United States. And now, Philip Morris International has entered the U.S. market as a competitor in the non-cigarette nicotine space. Altria followed that move with early investments in Juul (vaping) and Cronos Group (marijuana). Both ended with billion-dollar write-offs. When it tried again in the vaping space with the acquisition of Njoy, it was quickly embroiled in a lawsuit with Juul. Simply put, Altria has made strategic misstep after strategic misstep.
Is Altria a millionaire maker?
Is it possible that Altria turns its business around? Sure. However, given the declining core business and the repeated missteps in its attempts to find a new avenue for growth, this is a stock that most investors will likely want to avoid. In fact, only the most aggressive investors should probably consider Altria and its huge 7.4% dividend yield. In the end, that yield is high for a reason. If current business trends continue, it seems highly unlikely that Altria is going to be minting millionaires anytime soon.
