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