Altria (NYSE:MO) has long been regarded as one of the kings of dividend stocks. A regular, reliable producer, it’s hard not to like the income this stock produces for its shareholders. One of its most recent moves looks to cement that status a little more firmly. Investors, however, are skeptical, as Altria shares were down slightly in Monday afternoon’s trading.
Altria’s latest move features it offering a minimum of $2.75 billion to pick up NJOY, a startup firm that focuses on vaping technology. If that sounds familiar, it should; Altria recently tried to make a splash in the vape market with Juul. However, that deal didn’t work out very well at all, and now, Altria’s looking for a second chance. Thus, Altria laid out the offer on NJOY, one of a handful of vaping product makers whose products have approval from the FDA.
Juul may have settled some of the litigation around its products, but reports suggest it’s not out of the woods yet. With a potential FDA decision that could throw the company out of the market altogether about to land, Altria may be out of the vaping market altogether, at least for a while. Landing NJOY will give it a critical edge in a market that is still, at least somewhat, a growth market. That’s the kind of edge Altria needs, too; when it first invested in Juul, Juul was valued at $38 billion. Today, it’s just $714 million, a huge drop-off.
Analysts, meanwhile, are split on the notion, and most advise simply holding on based on four Holds, one Buy, and one Sell assigned in the past three months. Further, with an average price target of $47.42, Altria stock comes with slight upside potential.
