Altria: High-Yield Income Play Still Too Cheap To Ignore

Mar. 13, 2024 1:58 PM ETAltria Group, Inc. (MO) StockPM, XLP, MO32 Comments

Summary

  • Altria Group stock has slightly trailed the S&P 500 but remained resilient. MO attracts investors with its cheap valuation and robust dividend yields.
  • Altria faces a structural decline in its legacy tobacco portfolio and must improve its portfolio transition to sustain a valuation re-rating.
  • Despite challenges, Altria management is confident in its 2024 outlook and sees more robust growth in the second half of the year.
  • A less hawkish Fed in 2024 should provide robust valuation support for MO.
  • With MO still valued at a forward dividend yield of nearly 9.6%, it's still very cheap and has a substantial margin of safety.
  • Looking for a helping hand in the market? Members of Ultimate Growth Investing get exclusive ideas and guidance to navigate any climate. Learn More »
Philip Morris Changes Name To Altria

Mario Tama

In my previous update on Altria Group (NYSE:MO), I articulated that MO was working hard to establish a bottom. Over the past two months, MO's performance has slightly trailed the S&P 500 (SP500) but remained resilient. As

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

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