Hello fellow investors

this is post #6 out of #50, where I introduce you to all the dividend stocks in my portfolio

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Today we speak about a sin stock - Altria $MO

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Why it is called a sin stock? Cause it operates in the industry of:

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🔸Tobacco

🔸 Alcohol

🔸 Cannabis

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In fact, Altria's most famous product is Marlboro Cigarettes, which I suppose we are all familiar with.

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⚠️ A small disclaimer:

I do not smoke, I consider smoking a very bad habit, and deep inside I hope for a society where smoking is not contemplated. But, a good investment is always a good investment, right? 😂

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Altria is a very famous company in the dividend investor world; few stocks had a better performance than Altria, and many got rich thanks to it. $MO pays increasing dividends from 52 years, remarkable.

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OK, let's address the elephant in the room 🐘

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Is tobacco a dying industry? What's the logic to invest in an industry like that? People are stopping smoking everywhere

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That's all true. In the western world especially, there is a healthy way of thinking, and smoke is not cool like it was in 1960. So old smokers are dying, young people are not smoking much, and every year is becoming worse and worse (or technically, better and better if we see from the health point of view).

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Even with such a terrible outlook, Altria is increasing revenue year over year, with a stellar profit - how can be?

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Cause even if smoking rates are slowly going down, cost savings and price increases are able to keep the revenue up. Anyway, the problem is still there; where this company will be in the next 20 years?

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There is a limit to how much you can play with numbers. if your customers are fading away, soon your revenue will too.

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For such a reason in the last years, Altria is trying hard to diversity in new/complementary markets.

$MO invested heavily in Alcohol (ABInBev $BUD), Vaping (JUUL Labs), and Cannabis (Cronos $CRON) but with mixed results.

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$CRON is still a startup; while revenues are growing they are still losing money, and we are talking about a $1.3B company.. it's a minor investment.

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$BUD is a mature company, providing Altria some annual additional cash flow; nothing to say here.

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JUUL is the disaster 🤯

Cost to Altria $12.5B, the company is still facing FDA restrictions and bans, losing market share continuously. I believe that entering the vaping world was important, but the price paid was completely out of logic.

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But anyway, let's say that the vaping system is helping to offset the combustible smoking decline

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So, no nice outlook? For me, the biggest "hope" is represented by IQOS. If you are not familiar, IQOS is a heated tobacco cigarette, raising popularity almost everywhere apart from the US, where it's facing a patent infringement ban 🤦

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Anyway, heating tobacco is able to be marketed as "reduced-risk" cause they demonstrate that without combustion, there is a reduction of harmful and potentially harmful chemicals (FDA words)

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So going back to Altria stock, is this a good investment? I believe that Altria will be able to navigate the next years pushing on these smoking alternatives they created. I will be more than happy to see a deeper diversification.

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At the moment, $MO represents 0.92% of my dividend portfolio, and I have no plan to increase my position anytime soon.

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