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Few stocks offer the combination of both yield and EPS growth that Altria (NYSE:MO) does. For 44 years, Altria has been a dividend growth machine, with yearly dividend increases. Just like its sister company Philip Morris International (NYSE:PM), Altria has been a serial repurchaser of its stock. Altria currently offers a $0.44 quarterly dividend. At current prices, the stock yields about 4.90%.


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On April 25, Altria reported its Q1 2013 results. Altria saw its reported EPS soar 17% to $0.69. When excluding for certain items, Altria's adjusted EPS increased 10.2% to $0.54.


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Altria's total net revenues came in at $5.5B, a $0.14B, or 2.1%, decline from last year. Most of this revenue decline occurred in the smokeable products segment, which saw its revenue decline $0.13B, or 2.6%. However, Altria did see some revenue growth in its wine segment, which saw its revenue surge 11.5% to $0.13B.


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When taking a closer look at the smokeable products section, we can see that the results were not that bad. While revenues in that segment did decrease, adjusted OCI actually increased 1.3%. This increase was driven by betters margins, which improved by 90 basis points to 41.9%.


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During the quarter, Altria's smokeable products market share declined somewhat to 50.4%. Marlboro saw a 0.2% decline, to 43.5% share. However, Altria's other cigarette brands increased share by 0.1%, to 6.9%. Altria's "Black & Mild" cigars saw its market share decline 0.9% to 29.7%.


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Altria's best performing segment by far would have to be its wine division. Total wine volumes increased 10% to 1.7M cases. This increase was primarily driven by the Easter holiday. The "14 Hands" brand in particular saw volumes increase 46.8%.


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During the quarter, Altria completed its $1.5B share repurchase program when it bought back about 1.7M shares for about $57M. The average price for the shares repurchased was $34.05. However, Altria has authorized another share repurchase program. This new program is for $300M and is expected to be completed by the end of 2013. Since 2008, Altria has returned over $18B to its shareholders via dividends and share buybacks.


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Included in the earnings release, Altria updated its FY 2013 guidance. Altria's new guidance has FY EPS ranging from $2.49 to $2.55, from the prior $2.34 to $2.40 range. However, excluding certain one-time items, adjusted FY EPS ranges from $2.35 to $2.41. This adjusted EPS would represent a 6% to 9% growth rate when compared to the prior year.


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Conclusion

While Altria's new $300M share repurchase program is chump change compared to Philip Morris's, it is still noteworthy. When completed, Altria would have repurchased over $4B in stock since 2008. Did I mention that Altria is also posting decent EPS growth and has nearly a 5% yield? The midpoint of the adjusted FY 2013 EPS would give Altria a 15 P/E. In my opinion, Altria is worth buying on any weakness.

Disclaimer: The opinions in this article are for informational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned. Please do your own due diligence before making any investment decision.

Source: Altria Offers Both EPS And Dividend Growth