Daily Stock Analysis: Altria Group Inc.

Altria Group Inc. is known by the ticker symbol MO and is listed in the consumer defensive sector as a tobacco company. This is my fourth report on Altria Group Inc. for this Vista portfolio. I last reported on this company on July 26th.

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. 

single cigarette

Photo by Khai Nguyen on Unsplash

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.

In addition, it provides finance leasing services primarily in transportation, power generation, real estate, and manufacturing equipment industries. 

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's price per share was $49.70 as of Monday's market close. One year ago its price was $43.70. So MO's share price has popped up  13.7% in the past year. 

If Altria's stock trades in the range of $36.00 to $54.00 this next year, its recent $43.70 price might rise by $3.30 to reach $53.00 by September 1, 2022. My estimate is $0.63 under the median of one-year target estimates from nineteen broker analysts.

MO Dividends

Altria's most recent regular quarterly dividend payout of  $0.90 is payable on October 12th. The estimated annual payout of $3.60 yields 7.24% based on Monday's $49.70 closing price. Altria has paid quarterly dividends, since December 1995. That is 26 years.

MO Returns

Adding the $3.60 annual MO forward-looking dividend to my $3.30 price upside estimate shows a $6.90 potential gross gain, per share, to be reduced by any costs to trade Altria's shares.  

At Monday's $49.70 price per share, a little under $1000 would buy 20 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at the sale and might cost us  $0.50 per share.

Subtract that maybe $0.50 brokerage cost from my estimated $6.90 gross gain per share results in a net gain of $6.40 X 20 shares = $124.00 for a 12.4% net gain on a $994.00 investment.

So it is that Altria Group Inc. (MO) shows a possible 12.4% net gain including a 7.24% forward estimated dividend yield. 

Over the next year at this time, a $1000 investment in Altria Group Inc. (MO) could generate $72.40 in cash dividends alone. And a single share bought at Monday's closing price was $49.70! Thus, MO's share price is about 69% of the dividend income from $1K invested. So, according to my dogcatcher ideal, now is the time to pick up MO shares. The dividend from $1k invested is over 30% above the single share price. 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 market value.

Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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