Daily Stock Analysis: Altria Group Inc. (MO)

Altria Group Inc is known by the trading ticker symbol, MO. It is included in the Consumer Defensive sector as a Tobacco company. This is my third report for my Volio Portfolio on MO.

Altria comprises Philip Morris USA, U.S. Smokeless Tobacco, John Middleton, Ste. Michelle Wine Estates, Nu Mark, and Philip Morris Capital, although the company plans to wind down Philip Morris Capital by the end of 2022. 

It holds a 10.2% interest in the world's largest brewer, Anheuser-Busch InBev. Through its tobacco subsidiaries, Altria holds the leading position in cigarettes and smokeless tobacco in the United States and the number-two spot in machine-made cigars. 

The company's Marlboro brand is the leading cigarette brand in the U.S. with a 43% share in 2020.

The company sells its tobacco products primarily to wholesalers, including distributors; and large retail organizations, such as chain stores. 

Altria Group, Inc. was founded in 1822 and is headquartered in Richmond, Virginia.

Three key data points gauge dividend equities or funds like Altria Group Inc. (MO):

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money. 

MO Price

Altria Group Inc.'s price per share was $47.49 as of yesterday's market close. One year ago its price was $41.85. So MO price has increased almost 13.5% in the past year. 

If Altria Group's stock trades in the range of $36 to $56 this next year, its recent $47.49 price might rise by $5.51 to reach $53.00 by July 26, 2022. My estimate is nearly $1.00 below the median of estimates by twenty analysts tracking MO for brokerages.

MO Dividends

Altria Group's most recent regular quarterly dividend payout of  $0.86 was paid July 9, 2021, and projects an annual payout of $3.44 per share to yield 7.24% based on Friday's $47.49 closing price. MO has paid semi-annual variable dividends for 12 years.

MO Returns

Adding the $3.44 annual MO forward-looking dividend to my $5.51 price upside estimate shows an $8.95 potential gross gain, per share, to be reduced by any costs to trade Altria Group shares.  

At Friday's $47.49 price per share, a little under $1000 would buy 21 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at a sale and might cost us about $0.48 per share.

Subtract that maybe $0.48 brokerage cost from my estimated $8.95 gross gain per share results in a net gain of $8.47 X 21 shares = $177.87 for a 17.8% net gain on a $997.29 investment.

So it is that Altria Group In. shows a possible 17.8% net gain including a 7.24% forward estimated dividend yield. 

Over the next year at this time a $1000 investment in Altria Group. could generate $72.40 in cash dividends alone. And a single share bought at yesterday's closing price was $47.49! Thus, MO's share price is now 34.4% less than the dividend income from $1K invested. So, according to the dividend dogcatcher ideal, this is a good time to pick up Altria Group shares because the dividend from $1k invested exceeds the single share price by over 34%. Consider yourself alerted. 

All of the estimates above are speculation based on the past history of Altria Group Inc. (MO). Only time and money invested in this stock will determine its true worth.