Altria Stock Is Interesting, but Here's What I'd Buy Instead

The big draw with Altria (NYSE: MO) is likely its lofty 6.3% yield. However, you have to consider the very material negatives associated with the business that backs that yield.

If you are willing to take on a little extra risk for a high-yield stock like Altria, you might be better off with Hormel Foods (NYSE: HRL) and its roughly 5% yield instead.

Here's why.

Image source: Getty Images.

The problem with Altria

Altria has a high yield and has increased its dividend regularly. However, the company's most important business is selling cigarettes. While the company is classified as a maker of consumer staples, smoking is hardly a life necessity. In fact, the volume of cigarettes Altria sells has been steadily declining for years. For example, in 2025, cigarette volumes fell 10%.

To be fair, Altria has been using price hikes and stock buybacks to support its revenue and earnings. That has allowed for ongoing dividend increases. But it is still a fundamentally challenged business.

Hormel has a high yield and a turnaround plan

Hormel Foods is also facing challenges right now, but they aren't as severe. It is a large food manufacturer with a focus on protein products, such as meat and nuts. That's actually fairly well aligned with current consumer trends.

One of the big problems of late is that Hormel has had difficulty passing rising costs on to consumers. At this point, the company is refocusing on controlling costs and overhauling its portfolio, noting that it recently announced plans to sell its whole turkey business.

The goal of the sale is to focus on branded food products rather than commodity products, a theme that has been ongoing for Hormel.

This is the first big move from the company's interim CEO, Jeff Ettinger. Ettinger is a respected former CEO who was brought out of retirement to help the company get back on track and train a successor.

Notably, the efforts he's put into place have led to five consecutive quarters of organic sales growth (inclusive of the preliminary results just released for the first quarter of 2026). Essentially, the company looks like it is moving in the right direction.

Hormel is a reliable dividend stock

Hormel's 5% yield isn't quite as high as Altria's yield, but the business is fundamentally stronger. And, just as important, Hormel has increased its dividend annually for over 50 years, making it a Dividend King. So you know it has a firm commitment to returning value to investors via regular dividend increases. I think it is a better all-around story than Altria, given the full risk/reward profile.

Reuben Gregg Brewer has positions in Hormel Foods. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.