Altria Group Faces Revenue Decline Despite 6.8% Dividend Yield
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: Yahoo Finance
- Dividend Performance: Altria Group's annual dividend stands at $4.24 per share, yielding 6.8%, demonstrating the company's ongoing commitment to shareholder returns despite facing significant revenue pressures.
- Revenue Challenges: Although Altria has attempted to counter declining smoking rates by raising product prices, its revenue continues to fall, indicating that this traditional strategy may be losing effectiveness and could jeopardize future dividend payments.
- Investment Missteps: The company invested $12.8 billion for a 35% stake in Juul in 2018, but due to legal and regulatory issues, it shifted focus to NJOY, highlighting significant strategic errors in emerging markets that have exacerbated financial strain.
- Cash Flow Situation: Over the trailing 12 months, Altria generated approximately $9.2 billion in free cash flow, which covered $6.9 billion in dividend expenses, leaving limited cash for other purposes; without reversing revenue declines, future dividend growth may be at risk.
Analyst Views on MO
Wall Street analysts forecast MO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MO is 65.60 USD with a low forecast of 57.00 USD and a high forecast of 72.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Analyst Rating
4 Buy
1 Hold
1 Sell
Moderate Buy
Current: 61.030
Low
57.00
Averages
65.60
High
72.00
Current: 61.030
Low
57.00
Averages
65.60
High
72.00
About MO
Altria Group, Inc. operates a portfolio of tobacco products for United States tobacco consumers aged 21+. Its segments include smokeable products and oral tobacco products. The smokeable products segment consists of combustible cigarettes and machine-made large cigars. The oral tobacco products segment includes moist smokeless tobacco (MST) products and oral nicotine pouches. Its wholly owned subsidiaries include manufacturers of both combustible and smoke-free products. In combustibles, it owns Philip Morris USA Inc. (PM USA), and John Middleton Co. (Middleton), which are cigarette manufacturers. Its smoke-free portfolio includes ownership of U.S. Smokeless Tobacco Company LLC (USSTC), a global MST manufacturer, Helix Innovations LLC (Helix), a manufacturer of oral nicotine pouches, and NJOY, LLC (NJOY), an e-vapor manufacturer with a commercialized product portfolio. The brand portfolios of its operating companies include Marlboro, Black & Mild, Copenhagen, Skoal, on! and NJOY.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
