Altria: Stable Q1 Even As Macro Worsened; 6.6% Dividend Yield
(Preview) Company Update (MO US) (Buy)
Summary
Altria reported solid Q1 2022 results, with continuing earnings stability despite inflation, higher oil prices, and other macro pressures.
Adjusted EPS grew 4.7% year-on-year, driven by growth in the core Smokeables segment and helped by share repurchases.
Cigarette volume fell 8% on an adjusted basis, in line with Q4 2021 and against a strong prior-year quarter when it fell only 3.5%.
The Oral Tobacco business is declining, but more than offset by Smokeables growth. The proposed FDA menthol ban is not a threat.
With shares at $54.92, we expect a total return of 53% (14.1% annualized) by 2025 year-end. The Dividend Yield is 6.6%. Buy.
Introduction
Altria Group, Inc. released Q1 2022 results this morning (Thursday, April 28). Shares are currently up 0.5% (as of 8:30 pm EST).
We upgraded our rating on Altria to Buy in February 2020. Since then, shares have gained 30% (after dividends), including 45% since 2021.
Altria reported solid growth in Q1 2022 and reaffirmed its full-year outlook.…