Dividend Trap or Hidden Gem? Altria's 7.3% Yield Masks a Troubling Reality

Altria Group (MO) just caught my attention for all the wrong reasons — and maybe all the right ones.

The flashy numbers: 56 years of consecutive dividend increases, 7.3% yield, and a dirt-cheap P/E of 12.6. On paper, it screams “undervalued dividend stock.” Stock down to $58 from $67? Looks like a buying opportunity.

The red flags nobody’s talking about: Here’s where it gets messy.

Revenue? Tanking. Down from $26B (2020) to $24B (2024). That’s a multi-year decline, and top-line weakness doesn’t stay hidden forever — it eventually crushes the bottom line.

But wait — earnings actually jumped 144% ($4.5B to $11B). How? Because the payout ratio hit 76% — meaning the company is funneling three-quarters of its profit back to shareholders instead of reinvesting or building a safety buffer. That’s not sustainable; that’s financial engineering on borrowed time.

The real question: Is this a reliable income play, or is Altria milking a dying cash cow to keep shareholders happy?

Wall Street consensus? “Hold” with a $72 target (24% upside). But consensus also didn’t see this revenue collapse coming.

My take: The 7.3% yield is seductive, but declining sales + maxed-out payout ratio = ticking time bomb. This isn’t a buy for safety — it’s a gamble that Marlboro’s empire never crumbles. For dividend growth investors? There are safer plays.