Could Investing $10,000 in Altria Make You a Millionaire?

Altria (NYSE: MO) isn't a household sanction successful the user staples sector, but its main marque is astir apt 1 you know. Indeed, its Marlboro cigaret marque has a astir 42% stock of the U.S. cigaret market. Add successful a 7.3% output backed by a increasing dividend, and you tin spot wherefore investors would beryllium attracted to Altria's shares. Could a $10,000 concern assistance get you to millionaire status? Maybe, but you request to equilibrium the reward against the hazard earlier jumping in.

Altria is a user staples company due to the fact that the baccy products it makes are bought often by consumers careless of the marketplace environment. That has thing to bash with the quality of nicotine, of course, since tobacco, dissimilar nutrient and idiosyncratic attraction items, is not truly a necessity. The main baccy merchandise that Altria sells is cigarettes.

Cigarette consumers thin to beryllium precise marque loyal, truthful the immense marketplace stock Altria enjoys with Marlboro is simply a large payment implicit the competition. That said, Altria lone operates successful North America. It spun its overseas operations disconnected arsenic Philip Morris International (NYSE: PM) a fig of years ago. So the company's full aboriginal rests mostly connected its quality to execute successful conscionable a azygous region.

Thus, erstwhile you measurement back, Altria has 1 large merchandise with 1 large marque that operates successful conscionable 1 large market. That's a batch of attraction and should origin astir blimpish investors to pause. What if thing goes incorrect with the 1 merchandise with the 1 marque successful the 1 market? It mightiness look thing similar a multiyear diminution successful cigaret volumes that leads to a diminution successful Marlboro's marketplace stock arsenic much contention enters the broader baccy market.

This is precisely what is happening to Altria today. The company's cigaret measurement fell 10.2% successful 2024 (Marlboro's diminution was "just" 9%). Marlboro's marketplace stock fell from 42.2% successful 2023 to 41.7% successful 2024. And Philip Morris International is progressively competing with Altria successful non-cigarette baccy products.

Altria isn't ignorant to the precise worldly issues it faces. It has tried to bring successful caller products with much maturation opportunities, including an concern successful vape shaper Juul and successful a marijuana company. Both of those attempts to diversify beyond cigarettes flamed out, starring to billions of dollars worthy of write-offs. It hasn't fixed up, though, precocious buying vape shaper NJOY.

NJOY was further on successful its improvement than Juul and the concern has been moving retired better. For example, NJOY ended 2024 with a 15.3% measurement summation successful the 4th fourth and a 2.8-percentage-point summation successful marketplace stock to 6.4%. Both of those numbers were mostly driven by Altria plugging NJOY into its beardown and well-established organisation network. But they amusement the accidental comparative to the ongoing declines successful the cigaret space.