Altria: Buy, Sell, or Hold?
When a consumer staples company is sporting a nearly 10% dividend yield, the first thing income investors need to do is ask why. Consumer staples companies should generally be pretty boring businesses, and a yield that high is anything but boring.
Getting to the why in Altria's (NYSE: MO) case is pretty easy to do, but the answers suggest that most investors should tread very cautiously.
When you look at Altria's financial statements, it breaks its business up into smokeable products, which includes both cigars and cigarettes, and oral tobacco products. But there's even more to the story when you look at revenue. Smokeable products account for roughly 89% of the company's revenue, and cigarettes account for just about 98% of that division's shipment volumes. Simply put, Altria's business is all about cigarettes.
Source Fool.com
