The global market selloff in 2022 has lowered stock prices and valuations but simultaneously increased yields. As a result, there are now bargains in dividend growth or income stocks. One stock that is trading at a reasonable price-to-earnings (P/E) ratio and a relatively high dividend yield is Altria (NYSE:MO). The stock is trading at a fair valuation of about 11.14X earnings with an excellent dividend yield of 6.66%. Interestingly, the stock price is up for the year, but still, few stocks offer this combination. If you are trying to live off dividends, the high dividend yield is attractive. Hence, Altria should be on your watch list.
Overview of Altria
Altria traces its history back to 1847 in London, UK. In 1902, Philip Morris was incorporated in the US. Altria was divested from Philip Morris and rebranded in 2003. In 2007, Altria spun off its 84% stake in Kraft Foods. In 2008, Philip Morris International was divested, and Altria kept Philip Morris USA. Today, Altria owns Philip Morris USA, John Middleton Inc, and US Smokeless Tobacco Company. Additionally, the company has sizeable investment stakes in Cronos Group (CRON) and JUUL, and 10% of AB-InBev (BUD).
Major owned and licensed brands are Marlboro, Parliament, Virginia Slims, Merit, Benson & Hedges, Black & Mild, Copenhagen, Skoal, Red Seal, Husky, iQOS, etc. Philip Morris International sells Marlboro and Parliament outside of the US. Altria is the market leader in cigarettes and smokeless tobacco and No. 2 in machine-made cigars. The Marlboro brand is the No. 1 cigarette brand in the US.
The current CEO is Billy Gifford. Total revenue was $21,111 million in 2021 and $21,050 million in past 12 months.
Altria is faced with several challenges. First, the cigarette market is in secular decline, with many consumers quitting. Hence, volumes are decreasing annually. Similarly, oral tobacco volumes are declining, albeit at a slower rate…
Please read the complete article at my profile on Seeking Alpha for Altria (MO): Stellar Dividend Yield.
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