NYSE:MO

Stock Analysis Report

Executive Summary

Altria Group, Inc., through its subsidiaries, manufactures and sells cigarettes, smokeless products, and wine in the United States.

Rewards

Trading at 52.1% below its fair value

Earnings are forecast to grow 22.79% per year

Pays a high and reliable dividend of 7.44%

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 7.44% is not well covered by earnings



Snowflake Analysis

Established dividend payer with reasonable growth potential.


Similar Companies

Share Price & News

How has Altria Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.1%

MO

-1.1%

US Tobacco

0.5%

US Market


1 Year Return

-10.4%

MO

-10.9%

US Tobacco

20.3%

US Market

Return vs Industry: MO matched the US Tobacco industry which returned -10.9% over the past year.

Return vs Market: MO underperformed the US Market which returned 20.3% over the past year.


Shareholder returns

MOIndustryMarket
7 Day-1.1%-1.1%0.5%
30 Day-11.6%-11.6%2.0%
90 Day-7.9%-7.8%9.4%
1 Year-4.3%-10.4%-5.0%-10.9%22.8%20.3%
3 Year-29.4%-39.4%-28.9%-39.0%50.1%40.4%
5 Year1.3%-19.5%1.6%-19.2%73.1%54.1%

Price Volatility Vs. Market

How volatile is Altria Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Altria Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MO ($45.14) is trading below our estimate of fair value ($94.28)

Significantly Below Fair Value: MO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MO is unprofitable, so we can't compare its PE Ratio to the Tobacco industry average.

PE vs Market: MO is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate MO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: MO is overvalued based on its PB Ratio (13.5x) compared to the US Tobacco industry average (3.4x).


Next Steps

Future Growth

How is Altria Group forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

22.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MO is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: MO is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: MO's is expected to become profitable in the next 3 years.

Revenue vs Market: MO's revenue (2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: MO's revenue (2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MO's Return on Equity is forecast to be very high in 3 years time (103.9%).


Next Steps

Past Performance

How has Altria Group performed over the past 5 years?

-0.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MO is currently unprofitable.

Growing Profit Margin: MO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: MO is unprofitable, and losses have increased over the past 5 years at a rate of -0.6% per year.

Accelerating Growth: Unable to compare MO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: MO is unprofitable, making it difficult to compare its past year earnings growth to the Tobacco industry (2.3%).


Return on Equity

High ROE: MO has a negative Return on Equity (-20.42%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Altria Group's financial position?


Financial Position Analysis

Short Term Liabilities: MO's short term assets ($4.8B) do not cover its short term liabilities ($8.2B).

Long Term Liabilities: MO's short term assets ($4.8B) do not cover its long term liabilities ($34.7B).


Debt to Equity History and Analysis

Debt Level: MO's debt to equity ratio (441.1%) is considered high.

Reducing Debt: MO's debt to equity ratio has reduced from 483.1% to 441.1% over the past 5 years.


Balance Sheet

Inventory Level: MO has a low level of unsold assets or inventory.

Debt Coverage by Assets: MO's debt is not covered by short term assets (assets are 0.2x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: MO has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: MO has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

What is Altria Group's current dividend yield, its reliability and sustainability?

7.44%

Current Dividend Yield


Dividend Yield vs Market

company7.4%marketbottom25%1.4%markettop25%3.7%industryaverage6.3%forecastin3Years8.1%

Current dividend yield vs market & industry

Notable Dividend: MO's dividend (7.44%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: MO's dividend (7.44%) is in the top 25% of dividend payers in the US market (3.73%)


Stability and Growth of Payments

Stable Dividend: MO's dividends per share have been stable in the past 10 years.

Growing Dividend: MO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: MO is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: MO's dividends in 3 years are forecast to be covered by earnings (80.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure


CEO

Howard Willard (56yo)

1.8yrs

Tenure

US$11,573,699

Compensation

Mr. Howard A. Willard, III, BA (Hons), MBA., served as the Chief Operating Officer at Altria Group Inc., and served as its Executive Vice President and serves as its Director since 2018. He also serves as  ...


CEO Compensation Analysis

Compensation vs Market: Howard's total compensation ($USD11.57M) is about average for companies of similar size in the US market ($USD10.78M).

Compensation vs Earnings: Howard's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Howard Willard
Chairman & CEO1.8yrsUS$11.57m0.014% $11.8m
William Gifford
Chief Financial Officer4.9yrsUS$7.60m0.0092% $7.7m
Murray Garnick
Executive VP & General Counsel2.6yrsUS$5.43m0.0026% $2.2m
Charles Whitaker
Senior VP of Human Resources0yrsno data0.0057% $4.8m
Mac Livingston
Vice President of Investor Relations?0yrsno datano data
Salvatore Mancuso
Senior Vice President of Finance & Procurement4yrsno data0.0038% $3.2m
Jody Begley
Senior Vice President of Tobacco Products1.7yrsno data0.0047% $4.0m
W. Surgner
VP, Corporate Secretary & Associate General Counsel0yrsno data0.0011% $964.5k
Daniel Bryant
VP & Treasurer4.9yrsno data0.0015% $1.2m
John Nichols
Other Key Executive0yrsno datano data

3.3yrs

Average Tenure

53yo

Average Age

Experienced Management: MO's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Howard Willard
Chairman & CEO1.8yrsUS$11.57m0.014% $11.8m
Thomas Farrell
Presiding Director8.8yrsUS$320.03k0.00013% $109.0k
Kathryn A. McQuade
Independent Director8yrsUS$345.03k0.00017% $142.6k
W. Kiely
Independent Director8.3yrsUS$355.03k0.0016% $1.3m
Debra Kelly-Ennis
Independent Director7yrsUS$311.78k0.0015% $1.3m
John Casteen
Independent Director10yrsUS$330.03kno data
Dinyar Devitre
Independent Director12.1yrsUS$343.75k0.0051% $4.3m
George Muñoz
Independent Director15.3yrsUS$326.03k0.0016% $1.4m
Nabil Sakkab
Independent Director11.3yrsUS$315.03k0.0023% $1.9m
Virginia Shanks
Independent Director2.8yrsUS$300.03k0.00051% $427.7k

8.5yrs

Average Tenure

66yo

Average Age

Experienced Board: MO's board of directors are considered experienced (8.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Altria Group, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Altria Group, Inc.
  • Ticker: MO
  • Exchange: NYSE
  • Founded: 1919
  • Industry: Tobacco
  • Sector: Food, Beverage & Tobacco
  • Market Cap: US$83.869b
  • Shares outstanding: 1.86b
  • Website: https://www.altria.com

Number of Employees


Location

  • Altria Group, Inc.
  • 6601 West Broad Street
  • Richmond
  • Virginia
  • 23230
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MONYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
0R31LSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
MO *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
MOSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1968
PHM7DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
PHM7XTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
MOSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
ALTRWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
PM-UETLX (Eurotlx)YesCommon StockITEURJan 1968
MOBASE (Buenos Aires Stock Exchange)CEDEARS EACH 4 REPR 1 ORD USD0.3333ARARSJul 2001
MOOO34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REP 1 COM USD0.333333BRBRLMay 2019

Biography

Altria Group, Inc., through its subsidiaries, manufactures and sells cigarettes, smokeless products, and wine in the United States. It offers cigarettes primarily under the Marlboro brand; cigars principally under the Black & Mild brand; and moist smokeless tobacco products under the Copenhagen, Skoal, Red Seal, and Husky brands. The company also produces and sells varietal and blended table wines, and sparkling wines under the Chateau Ste. Michelle, Columbia Crest, and 14 Hands names; and imports and markets Antinori, Torres, and Villa Maria Estate wines, as well as Champagne Nicolas Feuillatte in the United States. In addition, it provides finance leasing services primarily in transportation, aircraft, power generation, real estate, and manufacturing industries. The company sells its tobacco products primarily to wholesalers, including distributors; large retail organizations, such as chain stores; and the armed services. Altria Group, Inc. was founded in 1919 and is headquartered in Richmond, Virginia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 00:15
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.