Altria Group Inc Increases Cash Payment to Shareholders
Altria Group Inc Announces 6.1% Dividend Increase
Tobacco companies have been some of the most solid dividend-payers in the stock market. Altria Group Inc (NYSE:MO) just proved the point again.
On March 1, Altria announced that its board of directors approved a quarterly dividend rate of $0.70 per share, representing a 6.1% increase from its previous payout of $0.66 per share. The dividend will be paid on April 10, 2018, to shareholders of record as of March 15. (Source: “Altria Increases Quarterly Dividend by 6.1% to $0.70 per Common Share,” Altria Group Inc, March 1, 2018.)
With this announcement, the company has raised its payout 52 times over the last 49 years.
Smoking rates have been declining, but that did not prevent Altria from running a profitable business. According to the company’s most recent earnings report, it generated adjusted net income of $3.39 per share in full-year 2017, representing an 11.9% increase from 2016. (Source: “Altria Reports 2017 Fourth-Quarter and Full-Year Results; Provides 2018 Full-Year Earnings Guidance,” Altria Group Inc, February 1, 2018.)
For full-year 2018, management expects the company to generate adjusted diluted earnings of between $3.90 and $4.03 per share, which would represent a growth rate of 15% to 19% from 2017.
Altria has said explicitly that the company intends to pay out approximately 80% of its adjusted diluted earnings per share to shareholders through dividends. So if it can achieve that profit target in 2018, another dividend increase could be on the way.
Trading at $62.43 apiece, MO stock offers a forward annual dividend yield of 4.49%.