Investing

The Best Stock for Cautious Investors

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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). 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.

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.


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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