Altria (MO) Advances While Market Declines: Some Information for Investors

Stocks with a strong record of growing dividends are often solid investments to generate significant income over time. One group of stocks that stands out in this regard is the Dividend Aristocrats.

Dividend Aristocrats are companies listed in the S&P 500 Index that have consistently increased their dividends every year for at least 25 years. These companies are known for their commitment to rewarding their shareholders with higher dividends, making them ideal for those looking for consistent income.

Investing in Dividend Aristocrats not only provides a steady income stream, but also allows investors to participate in the financial health and resilience of these companies. Their ability to maintain and increase dividends over decades indicates strong earnings and a solid business foundation, which lowers investment risk. Moreover, their long-term track record of earnings and dividend growth often enables them to outperform broader market indices.

Among Dividend Aristocrats, Altria , NextEra Energy , and Walmart stocks are among the best of the best for generating stable income. Let’s take a closer look at why these stocks could continue growing their dividend payouts in the coming years.

#1. Altria

Altria stands out for its long-standing dividend growth, and offers the highest yield among the Dividend Aristocrats. This makes it a compelling choice for income-focused investors looking for substantial returns.

During times of turbulence and uncertainty in the markets, many investors turn to dividend-yielding stocks. These are often companies that have high free cash flows and reward shareholders with a high dividend payout.

Benzinga readers can review the latest analyst takes on their favorite stocks by visiting Analyst Stock Ratings page. Traders can sort through Benzinga's extensive database of analyst ratings, including by analyst accuracy.

Below are the ratings of the most accurate analysts for three high-yielding stocks in the consumer staples sector.

Walgreens Boots Alliance, Inc.

• Dividend Yield: 11.09%
• UBS analyst Kevin Caliendo maintained a Neutral rating and cut the price target from $17 to $12 on July 3. This analyst has an accuracy rate of 71%.
• RBC Capital analyst Ben Hendrix maintained a Sector Perform rating and decreased the price target from $22 to $13 on July 2. This analyst has an accuracy rate of 73%.
• Recent News: On Friday, Walgreens Boots Alliance agreed to pay $106.8 million to settle allegations that it submitted false claims to government healthcare programs, violating the False Claims Act and state regulations.
• Benzinga Pro's real-time newsfeed alerted to latest WBA news.

B&G Foods, Inc.

Dividend Yield: 8.41%

• Barclays analyst Brandt Montour maintained an Equal-Weight rating and cut the price target from $10 to $8 on July 19. This analyst has an accuracy rate of 64%
• Piper Sandler analyst Michael Lavery maintained a Neutral rating and cut the price target from $9 to $8 on July 11. This analyst has an accuracy rate of 70%.
• Recent News: On Sept. 9, B&G Foods issued notice of full redemption of remaining 5.25% senior notes due 2025.
• Benzinga Pro’s charting tool helped identify the trend in BGS stock.

Altria Group, Inc.

• Dividend Yield: 7.89%
• Barclays analyst Gaurav Jain maintained an Underweight rating and raised the price target from $43 to $45 on Sept. 9. This analyst has an accuracy rate of 66%.
• Stifel analyst Matthew Smith maintained a Buy rating and raised the price target from $50 to $54 on Aug. 1. This analyst has an accuracy rate of 61%.
• Recent News: On Aug. 22, Altria increased its quarterly dividend by 4.1% to $1.02 per share.
• Benzinga Pro’s signals feature notified of a potential breakout in MO shares.

Read More:

• ‘If You Want Steel, You Do Nucor,’ Says Cramer When Asked About Gerdau

Latest Ratings for WBA

View More Analyst Ratings for WBA

View the Latest Analyst Ratings

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Altria (MO) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Over the past month, shares of this owner of Philip Morris USA, the nation's largest cigarette maker have returned +3.2%, compared to the Zacks S&P 500 composite's +3.7% change. During this period, the Zacks Tobacco industry, which Altria falls in, has gained 6.2%. The key question now is: What could be the stock's future direction?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Earnings Estimate Revisions

Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Altria is expected to post earnings of $1.36 per share for the current quarter, representing a year-over-year change of +6.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.8%.

For the current fiscal year, the consensus earnings estimate of $5.11 points to a change of +3.2% from the prior year. Over the last 30 days, this estimate has changed +0.1%.

For the next fiscal year, the consensus earnings estimate of $5.30 indicates a change of +3.8% from what Altria is expected to report a year ago. Over the past month, the estimate has remained unchanged.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Altria.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth Forecast

While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

In the case of Altria, the consensus sales estimate of $5.35 billion for the current quarter points to a year-over-year change of +1.4%. The $20.38 billion and $20.38 billion estimates for the current and next fiscal years indicate changes of -0.6% and 0%, respectively.

Last Reported Results and Surprise History

Altria reported revenues of $5.28 billion in the last reported quarter, representing a year-over-year change of -3%. EPS of $1.31 for the same period compares with $1.31 a year ago.

Compared to the Zacks Consensus Estimate of $5.43 billion, the reported revenues represent a surprise of -2.77%. The EPS surprise was -2.96%.

Over the last four quarters, the company surpassed EPS estimates just once. The company could not beat consensus revenue estimates in any of the last four quarters.

Valuation

Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Altria is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Conclusion

The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Altria. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.

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