Altria Group: Great Dividend, Upside Potential

For investors looking for stability in this current economic climate and a ‘nice’ 4,1% dividend yield, Altria (MO) seems to be an excellent opportunity.

Altria is the leading manufacturer of cigarettes, and other tobacco products, dominating global markets with:

• 50% market share in the United States
• 60% in Latin America
• 40% in Western Europe, and
• 25% in Japan

Just to put things into perspective, Marlboro generates more sales volume than the next 10 biggest brands in the US and current projections for the growth of world-wide cigarette consumption are for between 1 and 3% annually for the next two decades or so.

Furthermore, having finalized the spin-off of Kraft (KFT), management is concentrating on Philip Morris International which many feel will prove to be a real catalyst for growth. We believe that it would be quite reasonable for investors to target a share price appreciation of between 15 and 20% in the next 24 months whilst enjoying the dividend yield.

Disclosure: none

Comments

[xtrader:]

After MO spins off PMI then, MO will be a dead stock as all the growth is in the international markets. PMI will be the one to own.

2008 Feb 28 01:19 PM

[mkreisel:]

PMI is the whole point in buying MO now.

2008 Mar 01 06:08 PM

[mmacken:]

MO has been the best stock in my portfolio for many years, one of the few companies that consistently observes the interests (dividends, etc.) of shareholders. I have confidence in its future in spite of spinoffs.

2008 Mar 01 07:28 PM

[User 162945:]

What does everybody think the trading value of both PMI and MO will be post split. Will it be around the 70 range?

2008 Mar 12 12:40 AM