Altria Group (MO +0.37%) is emerging as a surprising player in the cannabis space, offering a high-yield dividend and consistent profitability, unlike many of its marijuana-focused counterparts. While Tilray Brands (TLRY +6.92%) struggles with chronic unprofitability and a 12% decline in shares year-to-date, Altria has maintained its status as a Dividend King, increasing its payouts for 56 consecutive years. The company’s robust free cash flow, driven largely by traditional cigarette sales, supports its dividend strategy even as it pivots towards next-generation tobacco products.
Altria’s significant investment in the Canadian cannabis company Cronos, now valued at approximately $429 million, positions it well should the U.S. cannabis market eventually decriminalize. Although Altria’s revenue from traditional cigarettes remains dominant, the company is actively working to diversify its portfolio, which could yield substantial returns if regulatory barriers ease.
For market professionals, Altria presents a compelling case for income-focused investors seeking exposure to the cannabis sector without the volatility associated with pure-play marijuana stocks.
Source: fool.com