 | | A 7.9% Yield That's Unlikely to Go Up in Smoke | | Marc Lichtenfeld, Chief Income Strategist, The Oxford Club |  Find the Top 3 EXTREME Dividend Stocks?
Palm Beach millionaire reveals how you could collect 100% on your savings every year... for life.
His secret here. | | | Editor's Note: This week, Marc analyzes a tobacco giant whose recent negative press casts a shadow on its promising cannabis initiatives.
The rise in vaping-related illnesses has caused even the highest potential pot stocks to tumble lately.
While this will pass as investors learn more and companies hike their safety measures, it's more important than ever to trust the experts and seek out the companies that will stand up to the test...
That's why here at Wealthy Retirement we rely on the expertise of our trusted friend Matthew Carr, cannabis investing expert at our sister e-letter Profit Trends.
Matthew has predicted some of cannabis's biggest leaps and connected his readers with gains of up to 1,720% - up to $800,000.
Click here to learn how you can profit from Matthew's expertise and find the marijuana industry's most profitable and undervalued players. Then, read on below to discover how its current struggles are playing out for one of the tobacco industry's kingpins.
- Mable Buchanan, Assistant Managing Editor
Shares of Altria Group (NYSE: MO) have been falling for more than two years.
This could be because an increasing number of investors don't want to invest in a cigarette company for ethical reasons, or it could be because it's hard to get excited about a business when the majority of its customers want to quit using its product.
It's tough enough already from a business and public relations perspective to be a tobacco company. But now Altria is facing difficulties with Juul. Altria invested $13 billion in the electronic-cigarette maker. | | | As you're probably aware, both federal and state governments are creating stronger regulations against e-cigarette products after several recent vaping-related deaths.
So with all of that going on, it's no wonder the stock is down and dividend investors are as jittery as a new ex-smoker 24 hours after their last smoke.
But income investors may not have to be as worried as the headlines suggest...
Free cash flow climbed the last two years, rising from $3.6 billion in 2016 to $8.2 billion in 2018. This year, it's expected to dip to $7.7 billion, which is still substantially higher than 2017's $4.7 billion. Last year, Altria paid out 73% of its free cash flow in dividends, which is within my comfort zone of 75%.
Based on the estimate for 2019, the payout ratio will be 81%, which is a little higher than I like and results in a penalty from SafetyNet Pro. | | | SafetyNet Pro is a groundbreaking tool that predicts dividend cuts with stunning accuracy. With it, you can determine the dividend safety rating of nearly 1,000 stocks. Access to SafetyNet Pro is reserved exclusively for subscribers of Marc's newsletter, The Oxford Income Letter. To learn more about SafetyNet Pro and The Oxford Income Letter, click here now. | | |
If free cash flow comes in higher than expected and knocks the payout ratio down to 75% or below, Altria could receive an upgrade next year.
The company has a good track record of raising dividends. Though Altria cut the payout in 2008, it began raising the dividend immediately. | | | | | | | So even though there was a dividend reduction, it was more than 10 years ago - which SafetyNet Pro does not consider. The fact that Altria has raised the dividend every year since adds to the company's dividend safety rating.
Altria faces some obstacles, like it always has. But cash flow remains sufficient to pay the dividend.
The next 12 to 18 months will be critical for the company. I'll be watching free cash flow carefully. Any changes could result in an upgrade or downgrade to the dividend safety rating.
For the immediate future, the 7.9% dividend yield is safe.
Dividend Safety Rating: B If you have a stock whose dividend safety rating you'd like me to analyze, leave the ticker symbol in the comments section.
Good investing,
Marc
P.S. After the market turbulence we've seen so far in 2019, and especially in the wake of the vaping controversy, it's crucial for investors to tread carefully. The best way to protect yourself is to make sure you can read all of the market's sectors.
Luckily, in addition to connecting readers with lucrative cannabis investing opportunities, my colleague and friend Matthew Carr has taken investor education into his own hands.
Click here to learn how you can dominate the market by taking his new Rags-to-Riches Masterclass. You'll learn everything from passive income and debt reduction strategies to conquering real estate and coming up with your own billion-dollar idea. | | | | | | | Bill O'Reilly's Wild Money SecretIn a tell-all video, Bill O'Reilly reveals the shocking way YOU can retire with a seven-figure nest egg. | | | | - More From Wealthy Retirement - | | | | | | | | | | | | | | | |
The Oxford Club is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that although our track record is highly rated by an independent analysis and has been legally reviewed, investment markets have inherent risks and there can be no guarantee of future profits. The stated returns may also include option trades. 
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