Recent Buy: Altria Group, Inc. (MO)

ID-100426334 Recent Buy: Altria Group, Inc. (MO)I added more shares with the purchase of Altria Group, Inc. (MO)

49 shares @ $46.08 on 8/28/2019.

This increases my forward 12-month dividend income by $164.64 to a total of $9,307.96. I also updated my portfolio page to reflect the change.

 

 

 

My Thoughts

With my most recent sock sale, I used that capital to buy more shares of Altria Group.

There has been a lot of bad news with the E-Cig industries which have been causing companies like MO, PM, BTI, and etc. to lose a lot of there share price value.

However, I think this is a short term problem. The three companies, I mentioned above, will continue to be profitable for the next 10 years.

The company has a forward PE of 8.8. The current PE is 12 where the 5-year average is 17.

2017 earnings came in at $3.39 and 2018 came in at $3.99. Analysts expect 2019 to earnings to come in at $4.19 and 2020 to come in at $4.53.

CFRA predicts earning growth of 8% for the next three years.

Currently, the dividend yield is at an all-time high of 8.37%. This blows the 5-year dividend yield average of 4.2% out of the water.

The only negative I see is that the payout ratio is a little on the high side. Based on 2018 earnings and dividend, the company had a payout ratio of 75.2%.

If we look at 2019 estimated earnings of $4.19 and a total of $3.24 of dividends for the full year. This gives us a payout ratio of 77%. Which is a little higher than 75% for 2018.

With all that said, I find MO to be undervalued, and I recommend it as a BUY at this time. I have a fair value price at $63.07. This means that MO is 53% Undervalued based on today’s price of $41.13 (9/20/2019).

 

mo-1024x771 Recent Buy: Altria Group, Inc. (MO)

Source: Fastgraphs.com

 

What do you think about the company? Plan on owning it or already do? or why not?

Thanks for reading, and don’t forget to connect with me through Facebook and Twitter to see my latest buys.

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