Today, I am posting the cigarette company Altria Group (MO), which is famous for its high dividend stocks in the United States. There is one reason I buy stocks in tobacco companies that I don't smoke. Because of tobacco smoke, I suffer from secondhand smoke for a lifetime, but there is nowhere to be compensated. So, I'm trying to get lifelong compensation with this company's stock dividend. Altria Group (MO) mainly sells cigarettes through its subsidiary Philip Morris (PM).
| Ticker | Market capitalization | Odds | Dividend Growth Rate (5 years) | Dividend Growth Year |
| MO | $87.7B | 7.4% | 9% | 13 years |
| PM | $147.45B | 5.11% | 3% | 12 years |
-About Company
Altria Group, Inc., through its subsidiaries, manufactures and sells tobacco, oral tobacco products and wine in the United States. It offers cigarettes primarily under the Marlboro brand, cigarettes primarily under the Black & Mild brands, Copenhagen, Squal, Red Seal, moist smokeless tobacco products under the Husky brand, and oral nicotine pouches. It also produces and sells variant and mixed table wines and sparkling wines under the Chateau Ste. Imports and sells Michelle, 14 Hands, Antinori, Tores, Villa Maria Estate wines, and Nicolas Feuillatte champagne from the United States. However, the main income accounts for 88% of the tobacco business. Altria's total sales grew from about $23.8 billion in 2011 to $26 billion last year over the past decade. Altria also owns 35% of JUUL Labs, the world's largest electronic vapor company, and 45% of the global cannabis company, the Kronos Group (NASDAQ:CRON). The stock price management is currently somewhat unfortunate, but it is doing well to expand its business through several subsidiaries.
It sells cigarettes through its subsidiary PM, but the stock price is not managed by both. To put aside expectations of a rise in stock prices, and choose between high dividends or a lifelong symbol, of course, the parent company, MO, is chosen. This is because if a risk arises in the parent company, the subsidiary PM can cover the necessary funds. And if the price of raw materials rises, the price of cigarettes also rises, so how much will it be effective against inflation? The share price has risen considerably in recent years due to inflation concerns.
U.S. retail share of Altria cigarettes 2012-2020
According to the report, Altria cigarettes had a U.S. retail share of approximately 49.2 percent in 2020.
Altria Group's share of the tobacco business is approximately 49%. This shows the number one in the industry. This is because the current stock price has fallen a lot, but it can be seen that it will be able to continue to pay dividends to us by making money in the future. Of course, stock price management can be difficult.
-Financial Statements
The company earns 8 to 9 trillion won in operating profit every year. In 2019, the non-cash items reached 9.4 trillion and the net profit reached -1.4 trillion. 6.8 trillion was spent as a dividend. In 2020, 3 trillion non-cash items were added, resulting in a net profit of 5 trillion. I spent 7 trillion in dividends. from now on?
The money the company makes since the 2008 financial crisis has been steadily increasing. Although it may not be able to maintain the dividend growth rate so far, it is a good sign that the cash earned from operations like this will rise to the right after hitting high dividend stocks.
-Dividend details
Overall dividend review: Altria Group pays an annual dividend of $3.44 per share and currently has a dividend yield of 6.55%. MO is leading the dividend payout ratio, as its dividend yield is higher than 75% of all dividend paying stocks. Altria Group has increased its dividend for 12 consecutive years, suggesting that it has a strong responsibility to maintain and increase its dividend. Altria Group's dividend payout ratio is 81.52%. Payout rates exceeding 75% are undesirable because they may not be sustainable. Based on EPS estimates, Altria Group's dividend payment rate is expected to reach 75.27% next year. This means that Altria Group may not be able to sustain its current dividend.
If I bought it near the corona low point, it would have been 9%, but it's a pity. If you buy in installments at the dividend ratio of 7~9%, it will be a good approach.
-Conclusion
1. A very long history of dividends is good, but since the 2008 financial crisis, dividend cuts have lowered confidence in the company.
2. It is remarkable that the company has achieved a 9% dividend growth thanks to steady operating profit growth since 2008.
3. If we dare recommend buying, MO looks better than PM in terms of improving operating profit.
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