Altria Lays Out a Transition to Smokeless Products. But It Begins With the Dividend.

Altria Group

maker of Marlboros and the largest U.S. cigarette company, has long viewed its dividend as the best way to return capital to investors. The approach is popular with its income-oriented retail base—an estimated 40% of shareholders, more than double the

S&P 500

average.

Altria has raised the dividend for 50 years; it has a nearly 9% yield. Since 2010, it’s targeted a roughly 80% payout ratio of earnings to dividends, among the S&P 500’s highest. In early March, Altria cut its ties with e-cig maker Juul Labs—leading to a $12 billion loss—and bought smaller NJOY for $2.7 billion.