One of the largest tobacco companies in the world –
ALTRIA GROUP
+1.17%
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opening:46.5
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low:46.45
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, is again trying to enter the e-cigarette market, this time by acquiring the privately held company NJOY for $2.75 billion. “We believe we can responsibly accelerate the smoking adoption of NJOY’s e-cigarettes among US adults and increase their competitiveness in a way that the company has not been able to do on its own,” says Altria CEO Billy Gifford.
One of Altria’s biggest and best-known deals in the field of electronic cigarettes was the purchase of 35% of the Juul company (JUUL) in exchange for $12.8 billion in 2018. Jewel encountered many difficulties from the regulator, who tried to reduce the increase in smoking these cigarettes among teenagers and young adults. Jewel eventually agreed to pay about $430 million in a settlement, after an investigation that exposed the marketing efforts of the company’s products to those young populations.
“Jeul is under many regulatory and legal difficulties, in addition to other uncertainties, some of which may exist for many years to come,” Gidford said. “While the appeal to the FDA’s decision has not yet been answered, we are sure that our scientific and practical support will support the continued marketing of Joule products,” the company said last week.
Altria’s stock has been on an upward trend since last summer and the company’s value is $84 billion. In the latest reports, the company slightly missed the analysts’ expectations in the top line with revenues of 5.08 billion dollars compared to the expectation of 5.14 billion dollars. In the bottom line, the company recorded a profit per share of $1.18 compared to the expectation of $1.17.
The share price now represents a dividend yield of 8%, while at last year’s low in July the yield reached up to 9.2%. Altria is known as a favorite company of many dividend investors thanks to the tough demand for its products, even during times of economic crisis, which allows the company to continue to increase the total dividend it distributes to its shareholders over the years. Since 2016, the annual dividend that the company distributed increased by 56% from $2.35 per share to $3.68 per share today.
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