Altria Group Inc (MO)

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5 Top Income Stocks That Could Soar in 2020 as Interest Rates Plunge
By: 24/7 Wall St. | January 24, 2020

One negative result of lower interest rates is the effect it has on savers and people that rely on reasonably safe and secure income. After raising rates three times in 2018, the Federal Reserve reversed course in 2019 and lowered them. It also started a new version of quantitative easing that has moved the benchmark 10-year yield back to the same level it was back in the summer of this year and in November of 2016, at 1.73%.

Some feel that the 10-year yield can go lower, much lower. In fact, some analysts feel that the bond eventually will touch the 1.25% level, which would blow through the lows of the past 20 years. While that is great for those looking to buy or refinance a new home or other major purchases, it’s very rough for conservative investors who need a steady stream of income.

Altria

This maker of tobacco products still offers value investors a great entry point and was hit recently as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro, one of the most valuable brands in the world.

Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer. In March 2008, it spun off its international cigarette business to shareholders. In December 2018, the company acquired 35% of Juul Labs. The company also has purchased a 45% stake in cannabis company Cronus for $1.8 billion.

The negative press on vaping has been a big headwind, and the crash in marijuana stock prices have weighed on this worldwide leader. In addition, the legal age to buy tobacco products recently was raised to 21. Despite all the headwinds, investors are still able to buy the stock at a very reasonable price.

Investors will pocket a huge 6.58% dividend. The Merrill Lynch price objective is $60, while the consensus estimate is $54.61. Shares were last seen trading at $50.56...

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