The Best Stock for Cautious Investors
Altria is a boring stock with a huge yield. It is ideal for cautious investors not keen on gambling with rollercoaster tech stocks, if they can overlook Altria’s core business.
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Not everyone wants to buy shares of the magnificent seven. Stocks like Alphabet, Amazon, Apple and Microsoft may have had a good run-up. But they had a hard run down less than two years ago. Meta lost close to half its market value.
Boring stocks can do the trick for people who want safety and not the fun of gambling. At the top of that list is Altria Group Inc. (NYSE: MO | MO Price Prediction). Its eye-popping yield is 9.2%. Plus, its stock’s movement is usually lazy.
The Problem With Altria Stock
The problem with Altria is that it makes products that make people sick, and kill some. It pretends to want to move a bit out of that business with a program called “Moving Beyond Smoking.” But this is promoting products that can still cause health risks but, Altria says, are somewhat safer: “By putting the consumer at the center of everything we do, we believe we can more effectively and equitably transition smokers to less harmful alternatives.” These include oral tobacco e-vapor and heated tobacco.
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What Altria does not mention as much is that tobacco kills 8 million people per year worldwide. Tobacco is still a huge part of its business.
However
Altria has rock-solid financials that will support its dividends for years. For instance, in the most recent quarter, the company had revenue of $6.5 billion and net income of $2.1 billion. It held over $9 billion in investment in securities.
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Altria stock trades in a narrow range. In the past 52 weeks, this ran from $40.91 to $48.11 per share. By the way, the stock is unlikely to go lower in a recession. Tobacco sales are not hit much by a slow economy.
It has a huge yield for those investors who can overlook Altria’s core business.
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
