June 26, 2025 a 07:31 am
MO: Dividend Analysis - Altria Group, Inc.
Altria Group, Inc. is a well-established entity within the tobacco sector, renowned for its impressive dividend history spanning 56 years. Despite the challenges faced by the industry, Altria's persistent commitment to its dividend policy has sustained investor confidence. The company's focus on maintaining a strong dividend payout, alongside strategic financial management, underscores its dedication to rewarding shareholders.
Overview 📊
Altria Group has demonstrated resilience within the volatile tobacco sector through its solid dividend performance. The current dividend yield is a notable 6.94%, supported by a dividend per share of $3.98.
| Metric | Value |
|---|---|
| Sector | Consumer Goods |
| Dividend Yield | 6.94% |
| Current Dividend per Share | $3.98 USD |
| Dividend History | 56 years |
| Last Cut or Suspension | None |
Dividend History 📈
With 56 consecutive years of dividend payments, Altria stands out for its unwavering commitment to dividend distributions, a critical factor for income-focused investors. This history enhances trust and predictability in shareholder returns.
| Year | Dividend Per Share |
|---|---|
| 2025 | $2.04 |
| 2024 | $4.00 |
| 2023 | $3.84 |
| 2022 | $3.68 |
| 2021 | $3.52 |
Dividend Growth 🏆
The growth of dividends is a testament to a company's financial health and its potential for future returns. Altria's five-year dividend growth rate of 4.05% is an exemplary indicator of incremental increases in shareholder returns.
| Time | Growth |
|---|---|
| 3 years | 4.35% |
| 5 years | 4.05% |
The average dividend growth is 4.05% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio 💰
Payout ratios provide insight into a company’s dividend sustainability by comparing dividends paid out to earnings and free cash flow. Altria maintains a balanced approach with a 65.94% EPS-based payout ratio and a 79.41% FCF-based payout ratio, ensuring dividend security while preserving capital for operational needs.
| Key Figure | Ratio |
|---|---|
| EPS-based | 65.94% |
| Free Cash Flow-based | 79.41% |
The payout ratios indicate a strong capacity to continue dividend payments, though the high FCF payout highlights the need for cautious cash flow management.
Cashflow & Capital Efficiency 💼
An understanding of cash flow and capital efficiency is critical for assessing a firm's ability to generate returns and fund dividends. Altria demonstrates a high free cash flow yield of 8.51% and maintains efficient capital usage, indicated by a 1.69% CAPEX to operating cash flow ratio.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Free Cash Flow Yield | 9.58% | 12.78% | 9.76% |
| Earnings Yield | 12.54% | 11.43% | 6.99% |
| CAPEX to Operating Cash Flow | 1.62% | 2.11% | 2.48% |
| Stock-based Compensation to Revenue | 0% | 0.28% | 0.24% |
| Free Cash Flow / Operating Cash Flow Ratio | 98.38% | 97.89% | 97.52% |
The data shows robust capital efficiency, with strong free cash flow and prudent capital expenditure, fostering positive investor sentiment.
Balance Sheet & Leverage Analysis🧮
Balance sheet analysis provides insights into a company's financial resilience, especially concerning debt levels and liquidity. Altria's leverage ratios emphasize the firm's judicious debt management.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Debt-to-Equity | -11.14 | -7.41 | -6.72 |
| Debt-to-Assets | 70.86% | 68.01% | 72.20% |
| Debt-to-Capital | 109.86% | 115.60% | 117.50% |
| Net Debt to EBITDA | 1.45 | 1.82 | 2.59 |
| Current Ratio | 0.51 | 0.49 | 0.84 |
| Quick Ratio | 0.39 | 0.39 | 0.70 |
Despite the negative debt-to-equity figures indicative of substantial liabilities, Altria has managed its interest coverage ratio adequately, ensuring financial flexibility.
Fundamental Strength & Profitability 📊
Fundamental strength underlines a company’s potential to sustain profitability and support dividends amidst various market cycles. Altria’s performance benchmarks indicate sound profitability metrics.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Return on Equity | -5.03% | -2.30% | -1.45% |
| Return on Assets | 0.32% | 0.21% | 0.16% |
| Margins: Net | 55.10% | 39.65% | 27.86% |
| Margins: EBIT | 72.30% | 58.91% | 41.17% |
| Margins: EBITDA | 73.70% | 60.23% | 42.26% |
| Margins: Gross | 70.27% | 69.67% | 68.86% |
| Research & Development to Revenue | 0% | 0% | 0% |
Altria’s robust profit margins position it well for sustained dividend health, although the negative return on equity is a crucial consideration for investor confidence.
Price Development 💹
Dividend Scoring System ✅
| Criteria | Score | Score-bar |
|---|---|---|
| Dividend Yield | 5 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 3 | |
| Financial Stability | 2 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Total Score: 31/40
Rating 🏅
Altria Group, Inc.'s solid dividend performance positioned within a mature market segment, sustained high yield, and consistent payment history make it an appealing choice for dividend-focused investors. However, potential investors should consider the company's leverage constraints and balance sheet to maintain a comprehensive perspective. Overall, the stock ranks favorably due to its formidable yield and consistent dividend strategy.