Dividend Champion Altria: Attractive Buy With Limited Downside

Altria (NYSE: MO) continues to deliver earnings and dividend growth despite being under the constant threat of increased regulation and litigation. While these concerns cannot be downplayed when evaluating the long-term prospects for tobacco companies in general, they are well documented and have been known issues for years. In the face of these challenges and negative trends in cigarette consumption in the United States, Altria continues to deliver solid returns to its investors.Rising RatesShares have been under significant pressure since early March, falling some 15% off of their highs. At least some, if not most, of this pressure may be due to rising interest rates and an inevitable federal funds rate hike expected to happen later this year.Valid arguments can be made that the Fed's ZIRP policy coupled with QE have boosted performance in dividend paying stocks since the financial crisis. The end of QE3 in October of 2014 had negligible impact on Altria's shares and also apparently had little impact on interest rates as they continued to fall to historic lows even after billions of dollars of bond purchases were halted.The bigger headwind to Altria is an apparent bottoming out of interest rates and subsequent reversal toward rising interest rates. This has been accompanied by stronger talk from the Fed about finally pulling the trigger and implementing a rate hike. Rates will rise, but given the unprecedented economic fragility exposed by the financial crises and coddling... Read more