Altria Group (MO) paid $1.70 per share in dividends over the last twelve months, which equates to a dividend yield of 5.16%. When you compare that yield to the 10-year Treasury bond of 1.96% you get a 2.6 times advantage.
One may argue that comparison is between apples and oranges–and I would say you are correct. Altria sells cigarettes and the US Treasury sells debt. According to Wikipedia, tobacco first became a commercial product in the 16th century and the United States became a county in 1776. So tobacco consumption predated the Unites States by more than 100 years and will probably outlive it too.
For those investors who can assume more principle risk than that of a US Treasury, upgrading your income stream from a higher yielding investment like Altria makes good sense.
The investments discussed are held in client accounts as of February 1. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
