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The massive draw with Altria (NYSE: MO) is probably going its lofty 6.3% yield. Nevertheless, it’s important to contemplate the very materials negatives related to the enterprise that backs that yield.
If you’re keen to tackle a bit additional danger for a high-yield inventory like Altria, you could be higher off with Hormel Meals (NYSE: HRL) and its roughly 5% yield as an alternative.
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Here is why.
Altria has a excessive yield and has elevated its dividend often. Nevertheless, the corporate’s most essential enterprise is promoting cigarettes. Whereas the corporate is assessed as a maker of client staples, smoking is hardly a life necessity. The truth is, the quantity of cigarettes Altria sells has been steadily declining for years. For instance, in 2025, cigarette volumes fell 10%.
To be truthful, Altria has been utilizing value hikes and inventory buybacks to help its income and earnings. That has allowed for ongoing dividend will increase. However it’s nonetheless a essentially challenged enterprise.
Hormel Meals can be dealing with challenges proper now, however they don’t seem to be as extreme. It’s a giant meals producer with a concentrate on protein merchandise, equivalent to meat and nuts. That is truly pretty nicely aligned with present client traits.
One of many large issues of late is that Hormel has had problem passing rising prices on to customers. At this level, the corporate is refocusing on controlling prices and overhauling its portfolio, noting that it lately introduced plans to promote its complete turkey enterprise.
The purpose of the sale is to concentrate on branded meals merchandise fairly than commodity merchandise, a theme that has been ongoing for Hormel.
That is the primary large transfer from the corporate’s interim CEO, Jeff Ettinger. Ettinger is a revered former CEO who was introduced out of retirement to assist the corporate get again on monitor and prepare a successor.
Notably, the efforts he is put into place have led to 5 consecutive quarters of natural gross sales progress (inclusive of the preliminary outcomes simply launched for the primary quarter of 2026). Primarily, the corporate seems like it’s transferring in the precise course.
Hormel’s 5% yield is not fairly as excessive as Altria’s yield, however the enterprise is essentially stronger. And, simply as essential, Hormel has elevated its dividend yearly for over 50 years, making it a Dividend King. So you already know it has a agency dedication to returning worth to buyers through common dividend will increase. I believe it’s a higher all-around story than Altria, given the total danger/reward profile.
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