Altria Group, Inc. (NYSE: MO) shares have weakened from their recent highs above $50 even though the company announced its decision to increase the dividend by 4.7% to $0.90/quarterly share dividend.
Fundamental analysis: Altria Group lifted its dividend by 4.7%
Altria Group is an American corporation and one of the world’s largest producers and marketers of tobacco, cigarettes, and related products. The company continues to improve its position in the market, and if you are looking for a solid return potential, shares of this company can be a good choice for long-term investors.
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Last month, Altria announced its decision to increase the dividend by 4.7% to $0.90/quarterly share dividend, which will be payable on October 12. The current dividend yield is above 7%, which makes this stock attractive for dividend-oriented investors.
Altria Group has a strong demand for its products, and the company reported better than expected second-quarter results in July. Total revenue has decreased by 12.1% Y/Y to $5.6 billion, which was less than expected, while the non-GAAP EPS was $1.23 for the second fiscal quarter (beats by $0.06).
“With our strong financial performance in the first half, we have raised the lower end of our full-year 2021 adjusted diluted EPS guidance range and now expect full-year adjusted diluted EPS to be in the range of $4.56 to $4.62, representing a growth rate of 4.5% to 6% from a $4.36 base in 2020,†said Billy Gifford, Chairman & CEO.
The business recovery continues to improve in the U.S., and according to Morgan Stanley, Philip Morris could easily continue executing its recent strategy of acquiring companies, and a revisiting of the merger discussions with Altria is also seen as an option.
Fundamentally looking, Altria Group trades at less than eight times TTM EBITDA, and with a market capitalization of $89.9 billion, shares of this company are not expensive. Altria Group’s balance sheet remains stable, and the company’s management is optimistic about the upcoming quarters in terms of growth which is certainly positive for shareholders.
Technical analysis: $45 represents a strong support level
Altria Group shares have weakened from their recent highs above $50, and if the price falls below $45 support, it would be a strong “sell†signal. On the other side, if the price jumps above $53, it would signal trading shares, and the next target could be around $55 or even 60.
Summary
Altria Group is in a good position to grow its business, and if you are looking for a solid return potential, shares of this company can be a good choice. Altria Group has a strong demand for its products, and the company recently announced its decision to increase the dividend by 4.7% to $0.90/quarterly share dividend.
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