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Altria (MO) Unveils Dividend Hike: What Else Should You Know?
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Altria Group, Inc. (MO - Free Report) is focused on enhancing shareholders’ returns. Keeping in tandem with this, the company unveiled a dividend hike of 4.4%, taking its quarterly dividend from 90 cents per share to 94 cents. This is payable on Oct 11, 2022 to shareholders of record as of Sep 15.
The new rate implies an annualized dividend rate of $3.76 per share, reflecting a dividend yield of 8.2% (based on the closing price of Aug 24). Altria has a dividend payout of 76.8% and a free cash flow yield of 9.6%. With an annual free cash flow return on investment of 33.2%, ahead of the industry’s 21.4%, the dividend payout is likely to be sustainable.
During the first half of 2022, Altria paid out dividends worth $3.3 billion. MO maintains a long-term dividend payout ratio goal of about 80% for adjusted earnings per share. Apart from this, Altria bought back 21.4 million shares for $1.1 billion in the first half of 2022. As of Jun 30, 2022, the company had shares worth roughly $750 million remaining under its $3.5-billion share repurchase program, which is anticipated to conclude by Dec 31, 2022.
We believe that Altria’s healthy financial status helps it reward shareholders. The company has been benefiting from its strong pricing power and focus on oral tobacco products, given consumers’ growing inclination toward the same.
Image Source: Zacks Investment Research
What’s Working for Altria?
The company’s strong pricing has helped it stay firm in the industry, even amid lower cigarette shipment volumes and higher taxes. Though higher pricing might lead to a possible decline in cigarette consumption, it is seen that smokers tend to absorb price increases owing to the addictive quality of cigarettes. In the second quarter of 2022, higher pricing offered some respite to revenues across the Smokeable Products and Oral Tobacco categories, which were otherwise hurt by soft shipment volumes. The continuation of such trends is likely to remain an upside for Altria.
There has been a general shift among consumers to several reduced risk tobacco products due to the serious health hazards of smoking cigarettes. Altria has been responding to the changing market scenario by offering several oral tobacco and heated tobacco products. Altria (through its subsidiary Helix Innovations) has full global ownership of on! — a popular tobacco-derived nicotine (“TDN”) pouch product. on! appears to be a worthwhile addition to Altria’s smokeless portfolio as oral TDN products are gaining popularity in the United States owing to their low-risk claims.
While Altria is battling cost inflation due to rising global energy, commodity and food prices, the abovementioned upsides are likely to work well for this Zacks Rank #3 (Hold) company and help it continue boosting shareholder value.
Shares of the company have slipped 2.1% in the year-to-date period against the industry’s rise of 1.2%.
The Chef's Warehouse, which engages in the distribution of specialty food products, sports a Zacks Rank #1 (Strong Buy). The Chef's Warehouse has a trailing four-quarter earnings surprise of 355.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CHEF’s current financial-year bottom line suggests significant growth from the year-ago reported number.
Campbell Soup, which manufactures and markets food and beverage products, carries a Zacks Rank #2 (Buy). Campbell Soup has a trailing four-quarter earnings surprise of 10.8%, on average.
The Zacks Consensus Estimate for CPB’s current financial-year sales suggests growth of 0.8% from the year-ago reported number.
General Mills, which manufactures and markets branded consumer foods, currently carries a Zacks Rank #2. General Mills has a trailing four-quarter earnings surprise of 6.5%, on average.
The Zacks Consensus Estimate for GIS’ current financial-year sales suggests growth of nearly 2% from the year-ago reported figure.
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Altria (MO) Unveils Dividend Hike: What Else Should You Know?
Altria Group, Inc. (MO - Free Report) is focused on enhancing shareholders’ returns. Keeping in tandem with this, the company unveiled a dividend hike of 4.4%, taking its quarterly dividend from 90 cents per share to 94 cents. This is payable on Oct 11, 2022 to shareholders of record as of Sep 15.
The new rate implies an annualized dividend rate of $3.76 per share, reflecting a dividend yield of 8.2% (based on the closing price of Aug 24). Altria has a dividend payout of 76.8% and a free cash flow yield of 9.6%. With an annual free cash flow return on investment of 33.2%, ahead of the industry’s 21.4%, the dividend payout is likely to be sustainable.
During the first half of 2022, Altria paid out dividends worth $3.3 billion. MO maintains a long-term dividend payout ratio goal of about 80% for adjusted earnings per share. Apart from this, Altria bought back 21.4 million shares for $1.1 billion in the first half of 2022. As of Jun 30, 2022, the company had shares worth roughly $750 million remaining under its $3.5-billion share repurchase program, which is anticipated to conclude by Dec 31, 2022.
We believe that Altria’s healthy financial status helps it reward shareholders. The company has been benefiting from its strong pricing power and focus on oral tobacco products, given consumers’ growing inclination toward the same.
Image Source: Zacks Investment Research
What’s Working for Altria?
The company’s strong pricing has helped it stay firm in the industry, even amid lower cigarette shipment volumes and higher taxes. Though higher pricing might lead to a possible decline in cigarette consumption, it is seen that smokers tend to absorb price increases owing to the addictive quality of cigarettes. In the second quarter of 2022, higher pricing offered some respite to revenues across the Smokeable Products and Oral Tobacco categories, which were otherwise hurt by soft shipment volumes. The continuation of such trends is likely to remain an upside for Altria.
There has been a general shift among consumers to several reduced risk tobacco products due to the serious health hazards of smoking cigarettes. Altria has been responding to the changing market scenario by offering several oral tobacco and heated tobacco products. Altria (through its subsidiary Helix Innovations) has full global ownership of on! — a popular tobacco-derived nicotine (“TDN”) pouch product. on! appears to be a worthwhile addition to Altria’s smokeless portfolio as oral TDN products are gaining popularity in the United States owing to their low-risk claims.
While Altria is battling cost inflation due to rising global energy, commodity and food prices, the abovementioned upsides are likely to work well for this Zacks Rank #3 (Hold) company and help it continue boosting shareholder value.
Shares of the company have slipped 2.1% in the year-to-date period against the industry’s rise of 1.2%.
Consumer Staple Stocks Worth a Look
Some better-ranked stocks are The Chef's Warehouse (CHEF - Free Report) , Campbell Soup (CPB - Free Report) and General Mills (GIS - Free Report) .
The Chef's Warehouse, which engages in the distribution of specialty food products, sports a Zacks Rank #1 (Strong Buy). The Chef's Warehouse has a trailing four-quarter earnings surprise of 355.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CHEF’s current financial-year bottom line suggests significant growth from the year-ago reported number.
Campbell Soup, which manufactures and markets food and beverage products, carries a Zacks Rank #2 (Buy). Campbell Soup has a trailing four-quarter earnings surprise of 10.8%, on average.
The Zacks Consensus Estimate for CPB’s current financial-year sales suggests growth of 0.8% from the year-ago reported number.
General Mills, which manufactures and markets branded consumer foods, currently carries a Zacks Rank #2. General Mills has a trailing four-quarter earnings surprise of 6.5%, on average.
The Zacks Consensus Estimate for GIS’ current financial-year sales suggests growth of nearly 2% from the year-ago reported figure.