This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis.
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At the request of a reader, I am having a look at Altria this week. However, I fear it is a bit early to do so considering the fact that the company is in the process of spinning off Philip Morris. In addition, last year at this time the company spun off its Kraft Foods holdings. This will mean that Altria will be a much different company after these spin-offs are complete. Altria will still have related holdings, but it will operate in a much different fashion. I would like to re-look at this analysis in a years time to see how things unfold. So, this analysis is a bit skewed by these spin-offs so please be cautious.
The Company: Altria Group, Inc. (MO-NYSE)
Altria Group, Inc. is the parent company of Philip Morris International, Philip Morris USA, John Middleton, Inc. and Philip Morris Capital Corporation. Altria Group owns 100% of the outstanding stock of Philip Morris International, Philip Morris USA, John Middleton, Inc. and Philip Morris Capital Corporation. Philip Morris International is a leading international tobacco company with seven of the top 20 global cigarette brands. Philip Morris USA is the largest tobacco company in the United States, with approximately half of the U.S. cigarette market. John Middleton, Inc. is a leading manufacturer of machine-made large cigars. Philip Morris Capital Corporation maintains a portfolio of leverages and direct finance leases. In addition, Altria Group has a 28.6% economic and voting interest in SABMiller, plc., the world’s second-largest brewer.
| No | |
| No |
THE FUNDAMENTALS
Revenue
Click to EnlargeRevenue Scoring
| Criteria | Scoring |
| Consistenly Up with No Down Years | 1.0 |
| Up Trend with Less Than 2 Down Years | 0.5 |
| Choppy with Greater Than 2 Down Years | 0.0 |
| My Revenue Score | 0.0 |
Earnings Per Share
Click to EnlargeEarnings Per Share Scoring
| Criteria | Scoring |
| Consistenly Up with No Down Years | 1.0 |
| Up Trend with Less Than 2 Down Years | 0.5 |
| Choppy with Greater Than 2 Down Years | 0.0 |
| My EPS Score | 0.0 |
TOTAL FUNDAMENTALS SCORE: 0.0
THE RATIOS
Return on Equity
Click to EnlargeReturn on Equity Scoring
| Criteria | Scoring |
| Above 15% for Last 5 Years | 1.0 |
| At Least One Year Below 15% in Last 5 Years | 0.0 |
| My ROE Score | 1.0 |
Other Ratios
| Ratio | Criteria | Value | Score (Pass=1 / Fail = 0) |
| Debt to Equity | Less Than 0.50 | 0.60 | 0.0 |
| Payout Ratio | Less Than 60% | 68% | 0.0 |
| Credit Rating | BBB+ | BBB+ | 1.0 |
| Total Ratio Score | 1.0 |
TOTAL RATIOS SCORE: 2.0
DIVIDEND DATA
Annual Dividends
Click to EnlargeDividend Scoring
| Criteria | Scoring |
| 25+ Years of Dividend Growth | 1.0 |
| 10+ Years of Dividend Growth | 1.0 |
| Less Than 10 Years of Dividend Growth | 0.0 |
| My Dividend Growth Score | 0.0 |
TOTAL DIVIDEND GROWTH SCORE: 0.0
STOCK VALUATION
| Valuation Metric | Criteria | Value | Score (Pass=1 / Fail = 0) |
| Dividend Yield | Cur Yld Greater Than 10 Yr Avg Yld | 4.3% | 0.0 |
| Div Yld Compared to SPY Div Yld | Cur Yld Greater Than SPY Yld | 2.4% | 1.0 |
| P/E Ratio | Cur P/E Less Than 10 Yr Avg P/E | 12.3 | 0.0 |
| Relative P/E | Relative P/E Less Than 1.0 | 1.24 | 0.0 |
| Price to Sales | Less Than 1.5 | 3.89 | 0.0 |
| Total Ratio Score | 1.0 |
Canadian Shareowner’s Association Stock Selection Guide Software Buy Price
| Buy Zone |
Maybe Zone |
Sell Zone |
Current Price | Rating | Scoring (Buy=1.0, Other=0.0) |
| 0.0 |
TOTAL STOCK VALUATION SCORE: 1.0
SUMMARY
Points Earned:
3 out of 14 – half points are rounded down to be conservative
The stock is rated LOW with 3 points earned through my analysis of the stock. Again, this company is going through a transition. The dividend growth has stopped, because of the spin-offs. Traditionally this company has been bought for its strong dividend and strong dividend growth. It is way too early to tell what the future holds for Altria. At this time, I am not a buyer of Altria and I am going to wait to see what happens over the next year before I relook at it.
| Rating | Points Required |
| High | 11+ points |
| Medium | 8-10 points |
| Low | < 8 points |
Reminder: This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis.
The Dividend Guy does not own shares in MO