Shares of Altria (MO 1.66%) were among the winners today, even as there was no major news out from the Marlboro-maker.
Instead, the tobacco giant seemed to benefit from a broader flight to safety as stocks tumbled for the second day in a row on fears of an extended conflict in Iran. Investors moved into defensive, dividend-paying stocks, and Altria was a winner as the tobacco sector is known for both its recession-proof positioning and high dividend yields. Altria currently offers a dividend yield of 6.6%.
The stock closed up 2.9% on the news.
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Why Altria is suddenly hot
After today's gains, Altria is now up 15% year-to-date. Today's move seemed clearly motivated by a rotation into defensive stocks as the State Street Consumer Staples Select Sector SPDR ETF (XLP 0.70%) rose 0.8% even as the S&P 500 fell 1.7%. Altria is well-positioned to benefit from that shift.
Altria's big tobacco peers, Philip Morris International and British American Tobacco, both gained today, but finished up less than 1%.
NYSE: MO
Key Data Points
What's next for Altria
Altria's business seems to be on more stable ground these days after struggling for years with regulatory pressure, including its disastrous investment in JUUL.
Earlier this week, Altria said it was expanding nationwide retail availability of On! Plus, a direct competitor with Zyn, which could drive market share gains in the fast-growing oral nicotine pouch segment.
Looking ahead, Altria's near-term performance should be determined by the broad market trend and bets around the war. We'll get a first-quarter update from Altria in a month. If the On! Plus rollout is showing results, the stock could get another boost.
