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Altria: How And When Investors Could Get The Anticipated Special Dividend

May 30, 2023 12:34 AM ETAltria Group, Inc. (MO)BUD191 Comments
Martin Fjeldhoj profile picture
Martin Fjeldhoj


  • Altria holds a ~10% stake in Anheuser-Busch InBev which is worth ~$10 billion.
  • Shareholders of Altria are income-oriented, and Altria wants to stay in tobacco long-term, so sitting on $10 billion of unrelated paper makes no sense.
  • Management knows this, and I think they are keen to sell even with statements that could point to the contrary.
  • But when will they sell, and how much will it bring in for investors? Here's my take.
Isolated shot of broken cigarettes on white background

kyoshino/E+ via Getty Images

This is what we know

Altria Group, Inc. (NYSE:MO) owns 185 million restricted shares and 12 million ordinary shares of Anheuser-Busch InBev (NYSE:BUD). The approximate market value of these shares is ~$10 billion.

Most of the ABI asset - as Altria calls

This article was written by

Martin Fjeldhoj profile picture
Investor with a focus on "total cash return" opportunities within US and abroad.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of MO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (191)

Butch Stone profile picture
Dump the BUD and buy TSLA.
@Butch Stone lol. BUD > Tesla
NJOY eletronical marijuana, because this is the future! This is Altria after 2030 😉 Mark my words. So will Altria live long and forever!
@StevieCool "NJOY eletronical marijuana, because this is the future! "

I don't know about that, but I do think that Altria will be here for a long while and I expect to be getting dividends from them.
@StevieCool I think you are pollyanny'ish about Altria and marijuana by 2030 given sclerotic government at all levels doing absolutely nothing to have a coordinated approach in legalizing and regulating marijuana. States & federal level need to have a coordinated plan. For now it is just a few states forging ahead, but look at California for example for what a disaster it is. The regulated marijuana farms going bankrupt as the illegal growers not paying the (ridiculously) high taxes completely under cut their competition on price.
@clrodrick we will see ;-) Never forget this: edition.cnn.com/...
I have held MO for over 50yrs. I plan t keep holding. This was an excellent analysis of the hidden value potential sale of AMBEV. The only thing missing, and this was a serious oversight, AMBEV pays millions in dividends each quarter to MO. This means MO is being paid to wait on an opportune time to dispose of the asset. It is not holding an idle asset on the books.
@Louverture Actually, the Dividend is now annual and amounted to $160 Million or so for the most recent payment. Way down from prior years but a nice increase over 2022. Meanwhile the share price has declined from $120 per share in 2016 to today's price of around $55 per share. Quite a haircut. The BUD holding screams for more than just a passive investment stance.
Martin Fjeldhoj profile picture
@Louverture Appreciate your comment and input! I'm aware that BUD pays a dividend and that this dividend has a positive effect on MO's income statement/cash flow statement. The thing is I thought of it as being not very substantial considering the negative impact BUD's share price has had on earnings (because of the equity accounting rule). PS: Really impressive to have held MO for 50+ years, way to go. You must have seen much dividend appreciation then :)
Bucknfl profile picture
I’ve owned MO forever. I will probably never sell or buy another share. It’s all about the dividends.
Martin Fjeldhoj profile picture
@Bucknfl Sounds like a good strategy!
"“Today, Bud Light and the National LGBT Chamber of Commerce (NGLCC), the exclusive certifying body for LGBT-owned businesses, announce they are extending their partnership to continue supporting economic opportunities and advancements for LGBTQ+ Americans and business owners across the country,” Anheuser-Busch said in a statement. " BUD statement 30 May 2023.

Well, we shot ourselves in that foot and it really hurts. Maybe if we shoot ourselves in the other foot it will quit hurting in this foot.
JonJJ profile picture
@GRComments marxist movement
What is the wisdom of following investment advice of people getting emotional about beer ads?
@MKNcompound "What is the wisdom of following investment advice of people getting emotional about beer ads?"

Very little. But it does pay to consider the buying patterns of those who get emotional about their beer. Look closely at commercials; they are emotional appeals. Watch interviews with the marketing idiot who pushed that direction. There was an underlying ideological push to her. She followed her ideology and violated marketing principles one learns in Marketing 101.
@MKNcompound When your core customer rejects your product, company fails.
buckiowa profile picture
@MKNcompound it might have saved you money, as Bud has lost billions in market cap and market share?
I was a Mo shareholder who used to be very against selling Bud. I still think bud is undervalued & was finally turning the page, but after they posted the transmission add, I am done with Bud. mo needs to get rid of the garbage
Special dividends often mark the top
@Colorado Oilman Costco begs to differ
Hasn't bud light dragged down the stock price at this point? Selling is fine, but they should wait until the Stock recovers..
@Scott.dam you should have read the article.
@NP20151153 Oh goody, just what I need a Dipshit making a value-add comment. The author seemed to be talking about since the restriction period that passed in 2021 and the $9B in losses they had taken. I work 60 hours a week I didn't study the thing. I don't know if he considered post Q1 losses. Maybe he did, but Anheuser Bush, exceeded Forecast in Q1 and the Dillion controversy happened after that. If they lost $9B and have yet to report the loss for Q2, look out. They are going to look really bad this quarter. Probably will be a great buying opportunity. Maybe they should sell now. I think eventually AB will recover (but maybe it won't), but I think the author may not have considered the Q2 loss.
Big Red Income Farmer profile picture
@Scott.dam my question is, what will drive the recovery of BUD? The beer was not very good to begin with, so taste is not a huge draw to get the customers back. It is not a "high powered" beer that would attract those looking for the extra alcohol.
The whole piece is pure speculation, to say the least.
I was at a packed beach bar this past weekend. Must have been close to 1000 people inside/outside.

Didn’t see anyone with a bud light in their hand. NOT ONE.
buckiowa profile picture
@Harry Sack same here.. A few Busch Lights, Mich Golden.

So not all is lost . But they may have to just admit defeat on Bud Light !
Martin Fjeldhoj profile picture
@Harry Sack I’m surprised how many personal experiences people have with the BUD situation - definitely food for thought
@Harry Sack I was on a Carnival cruise recently and saw Bud Light sales. Michelob Ultra by far the most sales though
BUD is worth 5% less now than this morning
TGT -4% too

Proves once again

Go Woke
Go Broke
@Harry Sack: And the last time I was in Target a week ago, they were packed. This despite some of these "boycotts" being outright acts of domestic terrorism, where conservatives are calling in bomb threats to Target stores over some damn pride merchandise. If you want to align your investing priorities with Neo-Fascists, be my guest.
Did Altria have any input on this AB debacle. Shareholders should be the top priority not politics.
Rob32 profile picture
@christinerogers You'd think, but these days you'd be wrong.
Martin Fjeldhoj profile picture
@christinerogers It would be interesting to hear their take, but as far as I know they have not commented the case
bk25 profile picture
@christinerogers Every public company out there is facing the same problem...ESG!
If there is one thing I've realized about Altria management is that they will find a way to sell their BUD stake at the worst possible time (lowest price). Things really not looking good for BUD right now either what a clown show.
It's crazy that only a few people here mentioned the BUD price now. It seems they think the boycott will blow over in a couple of months.
I disagree! The homosexual aspect will eventually be accepted, but the transsexual aspect will never be accepted. What parents are finding out is what the LGBT+ community has in store for their children. Disney might recover 10-20% of their losses, Target might do the same, but BUD has to realize there are other beers. Football and baseball are not recovered completely. Bud will have to cut ties completely with Trans-people and go back to patriotic, military, heroic, themes for awhile for their main base beer drinkers to come back. It's difficult for a Marlboro smoker to switch brands but beer drinkers have many alternatives. Target shoppers can go to WalMart for awhile, but will probably come back eventually. Corporations........Shut up about political things!!!! Send Black Rock stooges packing!!!
@chuckles I agree, In the case of AB, they are literally going to have to go after the trans community to recover. To be honest the women made a mistake. She had young children and seemed like a good person, but she has to be publicly fired at a minimum to regain their base. I'm actually shocked they have not done it yet.
Martin Fjeldhoj profile picture
@chuckles I'm actually a little surprised to read people's stories/experiences with BUD. This case runs deeper than I thought!
@Martin Fjeldhoj It doesn't make it right. There is so much division in this county
pmfesq profile picture
Management has been a thundering disgrace imho. Good luck to all
Not as a result of this post but today I opened a position in MO. I’m a retiree looking for “quality” income. Thru all the ups and down over the past quarter century and the market errors MO has created for itself, they continue to produce a div worth the investment. Best to all
Martin Fjeldhoj profile picture
@LKJBOB Thanks for sharing. Best of luck on your "investing otium"!
@LKJBOB I didn't open a position on MO recently, and so am down a bit on my capital. But, I didn't buy it for capital appreciation, I bought it for the dividend. I might add more later, but right now, I want to see how this BUD debacle affects share price. If it drops more over the next quarter, I'll buy more MO. I think it will recover in the long run. Either way, eventually, I will add more to my MO position.
@LKJBOB I've held MO w/ reinvesting dividends for decades. It's likely a solid investment for this reason alone.
F86 Sabre profile picture
Liked your article. You didn't pound the table just food for thought. Mr. Market controls the daily stock price (as in a few weeks to a few months) and is consistently quite irrational to the up and down side. The company management controls the long term (investment as opposed to trading) price of the stock. Control in regards to consistently increasing the earnings/revenue of the company by making intelligent business decisions. JUUL was NOT one of those. My fingers are crossed that a hard, painful lesson has been learned and the boys at the top, being paid big bucks to be smart, are indeed looking out for the shareholder and continued profitability of the company.
Martin Fjeldhoj profile picture
@F86Sabre Thanks for reading! You hit the nail on the spot. It's about looking out for the shareholder. Lots of retirees and people looking to supplement income are invested in this stock. Management must be smart about the situation. It's difficult because as a lot of commentators have pointed out, BUD is in a reputational rut at the moment. This is evident in the stock price which has already fallen a lot. But then again, you don't want to sell too soon or too cheap. You want to have the long term view. So interesting to see what management does from here.
threepalms2013 profile picture
While the 8% dividend is enjoyable, the valuation/holding risks outweigh the dividend value in my mind. Selling the asset and reducing overall debt levels is the better play.
Martin Fjeldhoj profile picture
@threepalms2013 Yes several commentators here seem to agree with you. I was a little surprised perhaps that many seem to want debt reduction instead, but it makes sense if you really want to protect the healthy dividend
Thank you. Very good article. I think Altria is not selling at this time for two reasons: 1. the price is currently too low. They will never sell BUD shares below 100 US dollars. 2. they don't need the money at this time. They will need the money around 2030, when not many people in the USA will smoke regular cigarettes anymore. Then BUD will hopefully be back at around 100 USD. We will see if I am right ;-)
Martin Fjeldhoj profile picture
@StevieCool Glad you liked the article. I agree with your points. And you said it very elegantly - they just don't need the money right now. But then who wouldn't like keeping $10B around for a rainy day...:-)
@Martin Fjeldhoj 20B are much nicer ;-) And they get a small but sweet dividend from BUD, also ;-)
Martin Fjeldhoj profile picture
@StevieCool True words my friend :-)
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