Altria Group Inc. is a holding company which operates through subsidiaries to manufacture and sell cigarettes and other tobacco products.
| Key Statistics | |||||||
| 52-Week Range | Avg. Daily Vol (3 Mo) | Market Value | Dividend Yield | Float % | Target Price | Consensus Rating (5 strong buy – 1 strong sell) |
Next Earnings Announcement |
| 28.89 – 48.33 | 8,485,665 | 74,225.3 | 8.6% | 99.9% | 47.83 | 4.18 | 29/01/2021 |
Altria Group Inc. is a holding company which operates through subsidiaries to manufacture and sell cigarettes and other tobacco products including combustible tobacco such as cigarettes and cigars, non-combustible such as e-vapor and nicotine pouches. It holds stakes in AB InBev the brewing company and cannabinoid company Cronos Group, as well as wine through Ste. Michelle Wine Estates.
The company operates three segments, smokeable products, smokeless products and wine. 90% of sales relates to smokeable products, with nearly 10% generated from smokeless products including dipping tobacco sold under UST while wine makes up the small remainder of revenue. Altria’s tobacco products are distributed to wholesalers, large retail and chain stores with the U.S. accounting for the overwhelming majority of revenue. The company faces structural challenges with long-term U.S. cigarette consumption in decline while California recently introduced a ban on menthol cigarettes from January 1st 2021, with California accounting for 7% of cigarette sales in the U.S.
Despite declining cigarette consumption, the company’s leading market share of 46% in the U.S. gives Altria substantial pricing power which has allowed profit growth to continue. Additionally, the company has several options to increase shareholder value through divesting its subsidiaries or minority interests as well as perusing new markets including vaping and cannabis. The charts below show the consistent revenue, net income margins and earnings per share growth which has allowed the majority of earnings to be paid as dividends with a yield of 7.66% and 7.46% in 2018 and 2019.
For the year ending December 2020 revenue is forecast to rise +4.7% to $20,728.3m and a further +3.8% in 2021 to $21,516.9. Earnings per share is forecast to rise +3.1% to $4.35 from $4.22 in 2019 and rise a further +5.3% in 2022 to $4.58. The stock current trades on forward P/E multiples of 9.2 and 8.7 for 2020 and 2021, a discount of -28% and -25% compared to peers which trade at 12.8 and 11.7 respectively.
The average target price of analysts covering the stock is $47.83 with 59% of analysts rating the stock as a buy, compared to 0% as a sell and 41% as a hold.
