All It Takes Is 226 Shares of Altria Stock to Earn $1,000 a Year in Dividends. Is It Worth It?

Altria (NYSE: MO), the largest tobacco company in the U.S., has raised its dividend annually for 57 consecutive years. That makes it a Dividend King, or a company that has increased its payout for at least 50 straight years. It currently pays a forward yield of 6%. If you buy 227 shares of Altria today for $16,632, you'll earn $1,000 in annual dividends.

Is Altria worth buying today?

Altria might seem like a shaky investment because adult smoking rates have steadily declined over the past six decades. However, Altria consistently raises its cigarette prices, cuts costs, and repurchases shares to boost EPS and support dividends.

It's also expanding its portfolio of smoke-free products -- which include its NJOY e-cigarettes and On nicotine pouches -- to grow its top line and reduce its long-term dependence on cigarettes and cigars. It expects its smoke-free revenue to rise to at least $5 billion -- or nearly a quarter of its projected sales -- by 2028.

From 2025 to 2028, analysts expect Altria's EPS to grow at a 14% CAGR. Its stock still looks like a bargain at 13 times forward earnings, and its trailing payout ratio of 89% gives it ample room for future dividend hikes. It isn't an exciting stock, but it's still worth buying today as the 10-Year Treasury's 5% yield pulls investors away from lower-yielding dividend stocks.

Leo Sun has positions in Altria Group. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.