Only a few investors have heard of Altria Group Inc. (NYSE: MO | MO Price Prediction). However, the company’s engine is its famous brand, Marlboro. The stock has a dividend yield of 9.1%. It is very likely to keep its current dividend or perhaps raise it. Altria has strong cash flow and an iron-clad balance sheet.
Altria is not a trader’s stock. It is up 6.5% this year, compared to 9.7% for the S&P 500. Its trading range is narrow. The stock has changed hands over the past 52 weeks between $39 and $48 a share. It trades near $43 today. (See who actually owns Altria.)
Revenue was down 2% to $24.5 billion last year, but adjusted diluted earnings per share rose 2% to $4.95. Billy Gifford, Altria’s chief executive officer, commented. “We grew adjusted diluted EPS by 2.3% and continued our long history of rewarding shareholders by delivering nearly $7.8 billion in dividends and share repurchases.” The company ended the year with $4 billion on its balance sheet.
About 80% of the company’s tobacco sales were under the Marlboro brand, which many brand valuations list as among the most valuable in the world.
Recently, Altria announced it would accelerate its $2.4 billion share repurchase program. This is another sign of how strongly management believes in rewarding shareholders, beyond the dividend.
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