MO

Altria is a high-margin cash machine in slow secular decline. Gross margin held at 62.5% and operating margin at 42.5%, with gross profit actually rising 1.2% to $14.5B even as revenue fell 3.1% to $23.3B — the fourth straight annual decline from $26.0B in FY2021. That gap is pure pricing power offsetting cigarette volume loss. Capex is trivial ($216M), so operating cash flow grew 6.1% to $9.29B. The MD&A's 2028 goals — a ≥60% adjusted OCI margin every year and mid-single-digit adjusted EPS CAGR — show the margin discipline is the whole game.

The payoff is income. Dividends paid were $6.96B (≈$4.17/share, ~6% yield at $69.12), covered roughly 1.3x by operating cash flow, with the filing targeting a 'progressive' mid-single-digit dividend through 2028. The catch: GAAP net income ($6.95B) almost exactly equals the dividend, so the payout looks ~100% on earnings even though it is a comfortable ~75% on cash. Management cut buybacks 71% to $1.0B, consistent with defending the dividend and steering toward its ~2.0x debt-to-EBITDA target.