Friday, September 23, 2016

Altria: Better, But Keep Waiting

dividend growth investing, value investing, discounted cash flow analysis, return projections, internal rates of return
Altria (MO) Dividend Stock Analysis 2016
Altria (NYSE:MO) has long been a beloved dividend growth company for those that can look past the moral issues with investing in "sin" stocks. In its various forms Altria has rewarded investors with 46 consecutive years of dividend increases including an 8.0% boost at the end of August.
The share price of Altria has been a boon to investors over the last year for multiple reasons. The stability of the company, investors being starved for yield, a concentration on U.S. focused companies due to the strength of the greenback. Whatever the reason the share price had climbed over 30% over the past year.
MO Chart
MO data by YCharts
However, since peaking in early July the share price has pulled back around 10% to the low $60's. The share price decline coupled with the dividend increase bumped the starting yield up to 3.84%. Seeing that large of a decline from a stalwart company such as Altria got me interested in wondering what you can expect from Altria if you purchased shares today.
Continue reading the article on Seeking Alpha.

Seeking Alpha - Altria (MO) Dividend Growth Stock Analysis 2016


  1. Thanks for another great analysis, JC!

    Long MO and estimating fair value at $60, so yeah -- still selling at a premium to fair value of about 7%.

    Take care!
    FerdiS, DivGro

    1. I would love to get involved in Altria. The market just keeps staying up high. Maybe we'll see some volatility around the election and early next year for some better entry points. We can hope. :)

    2. Ferdi,

      I feel it's in the realm of fair value, but with the general market loftiness I don't see much need to rush out and add shares at these levels. There were some decent put options just glancing through the option chain, but that quickly evaporated when the share price started reversing earlier this week.

      Thanks for stopping by!

    3. Greg,

      Yeah I've been holding out on Altria for a while, although I do have to say I skipped over it before. Really hope to get this one added to my portfolio soon and I hope we see some volatility right after the election. I have a speculative call position on the VIX so that would be perfect timing!

      Thanks for stopping by!

  2. MO is a different kind of animal, I think adding here is fine. We haven't seen a correction like this in a while so you gotta take advantage. If it drops further, even better.

    1. Captain,

      To me it's just not anything special especially since my general feel on the pulse of the economy/Fed/recession risks is that we're likely to see one in the next 12 months and as such further volatility in the markets. If I could scale into a position in MO with smaller purchases then I'd probably nibble a bit here, but I feel it's still overvalued quite a bit so I'll just sit and wait for the time being.

      Thanks for sharing your thoughts.