In an effort to shield American industries from what he described as the “threat posed by illegal aliens and drugs,” President Donald Trump unveiled a sweeping tariff plan aimed at key U.S. trading partners. The proposal called for a hefty 25% additional tariff on imports from Mexico and Canada, alongside an additional 10% duty on Chinese goods. However, following what he described as a “very friendly conversation” with Mexico’s President Claudia Sheinbaum earlier this week, Trump hit the brakes on his tariff plan, granting Mexico a one-month reprieve.
Later that day, Canada also secured a similar 30-day delay. While these delays ease short-term tensions, some companies are poised to gain a competitive edge amid this broader trade war. In a recent analyst note, Bank of America spotlighted Altria Group (MO) and Molson Coors Beverage Company (TAP) as potential winners.
With higher import costs threatening foreign competitors, Trump’s tariff strategy could tilt the playing field in favor of U.S. brands. Bank of America’s Bryan Spillane notes that Molson Coors stands to benefit as Mexican beer imports become less price competitive, potentially driving consumers toward American brews. Meanwhile, tobacco giant Altria Group may gain ground amid a potential crackdown on illicit imports. Thus, as trade tensions escalate, here’s a closer look at these two names.
Stock #1: Altria Group
Virginia-based Altria Group (MO) is a leading tobacco giant known for its diverse portfolio of tobacco products, featuring some of the most iconic brands in the industry, including Marlboro cigarettes, Black & Mild cigars, and Copenhagen smokeless tobacco. Beyond traditional tobacco, the company is also shaping the future of smoke-free alternatives with U.S. Smokeless Tobacco Company (USSTC), the global leader in moist smokeless tobacco, Helix Innovations, a top name in oral nicotine pouches, and NJOY, an FDA-authorized e-vapor brand.
Valued at a market cap of around $88.9 billion, shares of this tobacco powerhouse have climbed roughly 31% over the past year, slightly overshadowing the broader S&P 500 Index’s ($SPX) 22.8% return during the same stretch.
Altria is not only a favorite among tobacco consumers but also a standout choice for income investors, thanks to its remarkable dividend yield. With over 50 consecutive years of dividend hikes, the company has earned the prestigious title of Dividend King. On Jan. 10, Altria paid its shareholders a quarterly dividend of $1.02 per share, contributing to a robust annualized dividend of $4 per share, which translates to a highly enticing 7.60% yield. In addition to its dividends, Altria continues to reward investors through share repurchases, with an eye-popping $3.4 billion spent on buybacks in fiscal 2024, further enhancing shareholder value.
Altria delivered its fourth-quarter earnings report on Jan. 30, which narrowly edged past Wall Street’s forecast figures. The company reported $5.1 billion in revenue net of excise taxes, marking a 1.6% year-over-year increase and slightly beating analyst forecasts. Adjusted EPS also shot up by a solid 9.3% year-over-year, reaching $1.29, ahead of the expected $1.27.
Altria’s net revenues for the final quarter held steady at approximately $6 billion, maintaining flat year-over-year performance. While there was a marginal decline in smokable products and all other categories, this was more than offset by a modest performance in the oral tobacco products segment. The company saw a 2.7% year-over-year increase in oral tobacco net revenues, reaching $692 million, highlighting the segment's continued growth and resilience.
Looking forward to 2025, Altria projects adjusted EPS to range between $5.22 and $5.37, reflecting a growth of 2% to 5% from the $5.12 base in 2024. By comparison, analysts tracking Altria expect the company’s bottom line to climb almost 4% year over year to $5.32 per share in 2025, followed by another 4.1% rise to $5.54 per share in 2026.
Despite BofA’s optimism, Wall Street is taking a more cautious stance on MO stock, maintaining a consensus rating of “Hold” overall. Of the 11 analysts offering recommendations, four advise a “Strong Buy,” five suggest a “Hold,” and the remaining two maintain a “Strong Sell.”
The average analyst price target of $53.78 indicates a slight 2.2% potential upside from the current price levels, while the Street-high price target of $61 suggests that MO could rally as much as 15.9% from here.
Stock #2: Molson Coors Beverage
Colorado-based Molson Coors Beverage Company (TAP) has been brewing drinks for more than two centuries. With powerhouse brands like Coors Light, Miller Lite, and Coors Banquet, the company has built a portfolio of iconic beers.
The company is also evolving to offer a wide range of beverages, from Vizzy Hard Seltzer to Five Trail whiskey and even non-alcoholic drinks, continuing to innovate and meet the tastes of every consumer. With a market cap of around $11.2 billion, the company’s shares appear to be lagging behind the broader market, posting negative returns of almost 9.2% over the past year.
On Dec. 20, Molson rewarded its shareholders with a quarterly dividend of $0.44 per share. The company’s annualized dividend of $1.76 per share offers a solid 3.24% yield. With a conservative payout ratio of 29.28%, the company still has ample room for further dividend enhancements. Furthermore, the company is also committed to rewarding investors with share repurchases. In the third quarter, Molson returned almost $153 million to shareholders through a combination of dividends and share repurchases, further solidifying its dedication to maximizing shareholder value.
The beer maker’s third-quarter earnings report, released in November, presented a mixed bag. The company reported a 7.8% year-over-year decline in net sales, bringing in roughly $3 billion, which slightly missed Wall Street's $3.1 billion forecast. This was largely due to lower financial volumes as a result of challenges in the U.S. market, including a tough macroeconomic environment, unfavorable shipment timing, and the wind-down of a contract brewing agreement.
On the brighter side, despite a 6.2% annual drop in underlying net income to $1.80 per share, the company exceeded analysts’ forecasts by an impressive 9.1% margin. As of Sept. 30, the company held a robust cash position, with an underlying free cash flow of nearly $856 million. Management has adjusted its 2024 outlook, reflecting a slight 1% decline in net sales versus fiscal 2023 on a constant currency basis.
This revision in the company’s top-line outlook is attributed to softness in the U.S. beer industry during the peak selling season. Capital expenditures for the entire year are forecast at $750 million, with a 5% variance, while underlying free cash flow is projected to reach $1.2 billion, subject to a 10% fluctuation. Molson Coors Beverage is gearing up to disclose its fourth quarter and full-year earnings report before the opening bell on Thursday, Feb. 13.
Analysts tracking Molson Coors Beverage project the company’s profit to jump 6.6% year over year to $5.79 per share in 2024 and grow another 2.6% to $5.94 per share in 2025.
Wall Street appears optimistic about TAP stock, with a consensus “Moderate Buy” rating overall. Of the 20 analysts offering recommendations, five advise a “Strong Buy,” one suggests a “Moderate Buy,” 13 recommend a “Hold,” and the remaining one gives a “Strong Sell.” The average analyst price target of $62.29 indicates 14.6% potential upside from the current price levels, while the Street-high price target of $75 suggests that TAP could rally as much as 37.9% from here.
