Recent Buy: Altria Group, Inc. (MO)

I added more shares with the purchase of Altria Group, Inc. (MO)

36 shares @ $43.85 on 10/17/2019.

This increases my forward 12-month dividend income by $120.96 to a total of $9,562.32. I also updated my portfolio page to reflect the change.

My Thoughts

This is a company that I am sure a lot fo you already know. It is not one of the biggest holdings in my portfolio as well as the biggest dividend income per year. Altria now sends me 6.64% of my total dividend income. That is one of the big reasons why I am not going to buy any more shares of Altria until I can get this to about 3% of my income.

The company is expected to earn $4.19 EPS for the full year 2019. Currently, the company pays out $3.36 in dividends for the year. This gives us a dividend payout ratio of 80%. This is right in line with where the company likes to be.

CRFA projects that the company will continue to grow at an 8% rate for the next three years. Therefore, I see dividend growth to be around 5-6% going forward. The company’s most recent increase was 5%, which was announced in August.

The company has a dividend yield of 7.58% which is much higher than its 5-year average of 4.2%. A few weeks ago you could have gotten a yield of 8.4% basically double of its 5-year average.

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 of $57.12. This means that MO is 25% undervalued based on today’s price of $45.55 (10/21/2019).

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.

Image by Sira Anamwong at FreeDigitalPhotos.net

Connect with me: