Altria is the
holding company for Phillip Morris USA, John Middleton (machine made cigars), UST
(moist smokeless tobacco) and Phillip Morris Capital Corporation. As a result of the spin offs of Kraft Foods
and Phillip Morris International, breaking out past return on equity numbers as
well as dividend and earnings growth rates directly attributable to this entity
is beyond our pay grade; plus we have
yet to find any other analyst that has undertaken the task.
Looking forward, the primary attraction
that MO holds for us is its dividend yield (5.1%) as well as its very high cash
flow per share which should allow the company to increase its dividend annually
as well as engage in a share buy back program.
That said, the
company should be able to grow its earnings in the future as a result of:
(1) major
emphasis on new product line extensions into smokeless tobacco and cigars,
(2)
its joint effort with Okona to develop noncombustible nicotine products,
(3) increased operating
efficiencies,
Negatives:
(1) the recent
large increase in the Federal excise tax on cigarettes,
(2) increased
restricts on smoking,
MO is rated B+
by Value Line, has debt to equity ratio of 79% and its stock yields 5.1%.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2009
MO 5.1% 7% 75% 4
Debt/ EPS Down Net Value Line
Equity ROE Since 2008 Margin
Rating
MO 79%
61% 1 20% B+
Chart
Note: MO stock made great progress off its March
2009 low, quickly surpassing the downtrend off its January 2008 (red line) high
and the November 2008 trading high (green line). Long term the stock is in an uptrend
(straight blue lines). Intermediate term
it is in an uptrend (purple lines). The
wiggly blue line is on balance volume.
The High Yield Portfolio owns a full position in MO. The upper boundary of its Buy
Value Range Sell
Half Range
6/13
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