Balancing Dividends and Fundamentals: The Case of ALTRIA GROUP INC (NYSE:MO).

ALTRIA GROUP INC (NYSE:MO) was identified as a stock worth exploring by dividend investors by our stock screener. NYSE:MO scores well on profitability, solvency and liquidity. At the same time it seems to pay a decent dividend. We'll explore this a bit deeper below.

Analyzing Dividend Metrics

ChartMill assigns a Dividend Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing various dividend elements, such as yield, historical performance, dividend growth, and sustainability. NYSE:MO has been awarded a 8 for its dividend quality:

• MO has a Yearly Dividend Yield of 7.41%, which is a nice return.
• MO's Dividend Yield is rather good when compared to the industry average which is at 4.25. MO pays more dividend than 87.50% of the companies in the same industry.
• Compared to an average S&P500 Dividend Yield of 2.30, MO pays a better dividend.
• MO has been paying a dividend for at least 10 years, so it has a reliable track record.
• MO has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.

A Closer Look at Health for NYSE:MO

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:MO scores a 5 out of 10:

• An Altman-Z score of 4.60 indicates that MO is not in any danger for bankruptcy at the moment.
• MO has a Altman-Z score of 4.60. This is amongst the best in the industry. MO outperforms 87.50% of its industry peers.
• The Debt to FCF ratio of MO is 2.89, which is a good value as it means it would take MO, 2.89 years of fcf income to pay off all of its debts.
• Looking at the Debt to FCF ratio, with a value of 2.89, MO belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.

Exploring NYSE:MO's Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:MO, the assigned 8 is noteworthy for profitability:

• Looking at the Return On Assets, with a value of 31.94%, MO belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 34.83%, MO belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
• The last Return On Invested Capital (34.83%) for MO is above the 3 year average (34.47%), which is a sign of increasing profitability.
• MO's Profit Margin of 46.78% is amongst the best of the industry. MO outperforms 100.00% of its industry peers.
• MO's Profit Margin has improved in the last couple of years.
• Looking at the Operating Margin, with a value of 48.81%, MO belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
• MO's Operating Margin has improved in the last couple of years.
• Looking at the Gross Margin, with a value of 59.71%, MO is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
• In the last couple of years the Gross Margin of MO has grown nicely.

More Best Dividend stocks can be found in our Best Dividend screener.

Check the latest full fundamental report of MO for a complete fundamental analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.