Altria's Oral Nicotine Pouch Product Is Going Nationwide. Is the Stock a Buy in 2026?

Kudos to tobacco giant Altria Group (NYSE: MO). Recognizing that traditional cigarettes are a dying business (it's embraced the mantra of "moving beyond smoking," in fact), it's been pivoting to safer alternatives. One of these alternatives is nicotine pouches, manufactured by subsidiary Helix Innovations and sold under the "on!" label.

Now the company's expanding this brand, and its reach. Following recent FDA authorizations of newer "on! PLUS" pouches with higher nicotine levels and made from a more comfortable material, now Altria is expanding this product's brick-and-mortar retail availability from just three states to the entire nation.

The question is, of course, whether or not Altria stock is a worthy buy in 2026.

The answer is arguably yes, but not for this reason.

Smart shift

Altria is smart to pivot away from smoking, which -- due to health concerns and effective cessation efforts -- has been steadily declining for decades now. Indeed, data from Gallup indicates the prevalence of smoking among consumers living in the United States has fallen from 1954's peak of 54% to 2024's record low of 11%. Population growth hasn't been able to offset this decline.

But quitting smoking en masse hasn't necessarily funneled all former smokers to alternative vices like Altria's vaping products -- sold under the NJOY label -- or the aforementioned on! line of consumables.

Image source: Getty Images.

And the numbers bear this out. Despite a measurable near-10% decline in its total unit sales of cigarettes last year, this company's oral tobacco product revenue only improved less than 1%, slowing from 2024's growth of just over 4%. Moreover, of the mere one-third of Altria's top line that comes from oral/smokeless products, its actual smokeless tobacco products like Copenhagen and Skoal still account for a bigger portion of this smaller segment's revenue.

The point is, nicotine pouches don't exactly move the needle much for Altria.

Not helpful, but not necessary to income investors either

That's not to say they can't. As was noted, this widened retail expansion grows in-store access to on! goods from three states to every U.S. state. That's not insignificant. Moreover, these goods from Altria's Helix were already seeing some measurable unit shipment growth in 2025. There's some momentum to build on to be sure, in step with the entire nicotine pouch category's growing share of the United States' entire oral tobacco business.

The chief concern here, rather, is the uncertain longevity of all of Altria's total business. The company's not actually offsetting the deterioration of its smoking revenue with alternatives. Oral nicotine pouches are mostly just displacing the use of oral tobacco, without the net addition of new regular users.

Also bear in mind that while this retail expansion likely will help add revenue that wasn't accessible before, most on! and on! PLUS products have been available for online purchase in most states for a while now. It remains to be seen if drive-up availability will make a major impact on Altria's oral/smokeless business, since much of its target consumers may already be buying these goods online.

Still, if your primary goal is generating income, MO stock's forward-looking dividend yield of 6.7% is head-turning to be sure, easily offering more reliable income than similarly risky assets. And yes, even if not indefinitely, Altria can maintain these payments for a long, long time. It's managing the slow wind-down of cigarette smoking brilliantly, ensuring its own fiscal longevity. Just don't count on any meaningful growth beyond modest dividend increases, extending the company's 56-year track record of increased annual per-share payouts.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.