The Number That Should Worry Altria Shareholders
Altria (NYSE: MO) is operating a cash-cow business, effectively trying to get as much milk as it can from its cigarette sales while it can. That's not a bad plan. However, there's only so much milk you can get from the cow in these situations, and investors should probably be increasingly worried about the long-term prospects of Altria's dividend.
Consumer staples giant Procter & Gamble (NYSE: PG) has a lot of cash-cow products. The list includes toothpaste, paper towels, toilet paper, and feminine hygiene products, among many others. It also has some iconic brands in its portfolio, like Bounty and Pampers, to name just two.
What sets it apart from so many of its peers is Procter & Gamble's ability and success with investing in its businesses to drive new product innovation and, thus, consumer demand. It has been able to milk these cash cows for a long time, and assuming it doesn't suddenly stop spending on research & development, it should be able to keep milking them for years to come, as well.
Source Fool.com
