ALTRIA GROUP INC (MO) Stock Fundamental Analysis
NYSE:MO - New York Stock Exchange, Inc. - US02209S1033 - Common Stock - Currency: USD
Taking everything into account, MO scores 6 out of 10 in our fundamental rating. MO was compared to 8 industry peers in the Tobacco industry. While MO belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. MO has a bad growth rate and is valued cheaply. Finally MO also has an excellent dividend rating. These ratings could make MO a good candidate for value and dividend investing.
1. Profitability
1.1 Basic Checks
In the past year MO was profitable.
In the past year MO had a positive cash flow from operations.
MO had positive earnings in each of the past 5 years.
In the past 5 years MO always reported a positive cash flow from operatings.
1.2 Ratios
MO's Return On Assets of 31.94% is amongst the best of the industry. MO outperforms 100.00% of its industry peers.
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.
MO had an Average Return On Invested Capital over the past 3 years of 34.47%. This is significantly below the industry average of 65.29%.
The 3 year average ROIC (34.47%) for MO is below the current ROIC(34.83%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 31.94% | ||
| ROE | N/A | ||
| ROIC | 34.83% |
ROA(3y)22.85%
ROA(5y)16.84%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)34.47%
ROIC(5y)31.51%
1.3 Margins
With an excellent Profit Margin value of 46.78%, MO belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
MO's Profit Margin has improved in the last couple of years.
MO has a Operating Margin of 48.81%. This is amongst the best in the industry. MO outperforms 87.50% of its industry peers.
MO's Operating Margin has improved in the last couple of years.
The Gross Margin of MO (59.71%) is better than 75.00% of its industry peers.
MO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 48.81% | ||
| PM (TTM) | 46.78% | ||
| GM | 59.71% |
OM growth 3Y3.13%
OM growth 5Y3.4%
PM growth 3Y70.3%
PM growth 5YN/A
GM growth 3Y3.41%
GM growth 5Y3.35%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MO is creating value.
Compared to 1 year ago, MO has less shares outstanding
Compared to 5 years ago, MO has less shares outstanding
Compared to 1 year ago, MO has a worse debt to assets ratio.
2.2 Solvency
MO has an Altman-Z score of 4.52. This indicates that MO is financially healthy and has little risk of bankruptcy at the moment.
MO's Altman-Z score of 4.52 is amongst the best of 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.
The Debt to FCF ratio of MO (2.89) is better than 87.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.89 | ||
| Altman-Z | 4.52 |
ROIC/WACC4.44
WACC7.84%
2.3 Liquidity
A Current Ratio of 0.51 indicates that MO may have some problems paying its short term obligations.
The Current ratio of MO (0.51) is worse than 87.50% of its industry peers.
A Quick Ratio of 0.39 indicates that MO may have some problems paying its short term obligations.
MO has a Quick ratio of 0.39. This is amonst the worse of the industry: MO underperforms 87.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.51 | ||
| Quick Ratio | 0.39 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.64% over the past year.
The Earnings Per Share has been growing slightly by 4.03% on average over the past years.
The Revenue has decreased by -1.90% in the past year.
Measured over the past years, MO shows a decrease in Revenue. The Revenue has been decreasing by -0.89% on average per year.
EPS 1Y (TTM)3.64%
EPS 3Y3.63%
EPS 5Y4.03%
EPS Q2Q%9.32%
Revenue 1Y (TTM)-1.9%
Revenue growth 3Y-2.62%
Revenue growth 5Y-0.89%
Sales Q2Q%1.63%
3.2 Future
MO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.09% yearly.
MO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.31% yearly.
EPS Next Y7.23%
EPS Next 2Y5.4%
EPS Next 3Y4.74%
EPS Next 5Y4.09%
Revenue Next Year-0.14%
Revenue Next 2Y0.34%
Revenue Next 3Y0.28%
Revenue Next 5Y1.31%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 10.73, which indicates a very decent valuation of MO.
Compared to the rest of the industry, the Price/Earnings ratio of MO indicates a rather cheap valuation: MO is cheaper than 87.50% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.63, MO is valued rather cheaply.
The Price/Forward Earnings ratio is 10.01, which indicates a very decent valuation of MO.
MO's Price/Forward Earnings ratio is rather cheap when compared to the industry. MO is cheaper than 87.50% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.68, MO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.73 | ||
| Fwd PE | 10.01 |
4.2 Price Multiples
75.00% of the companies in the same industry are more expensive than MO, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, MO is valued cheaper than 87.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.81 | ||
| EV/EBITDA | 9.46 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
MO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.48
PEG (5Y)2.66
EPS Next 2Y5.4%
EPS Next 3Y4.74%
5. Dividend
5.1 Amount
MO has a Yearly Dividend Yield of 7.61%, which is a nice return.
Compared to an average industry Dividend Yield of 4.30, MO pays a better dividend. On top of this MO pays more dividend than 87.50% of the companies listed in the same industry.
MO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.61% |
5.2 History
The dividend of MO has a limited annual growth rate of 4.03%.
MO has paid a dividend for at least 10 years, which is a reliable track record.
MO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.03%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
60.92% of the earnings are spent on dividend by MO. This is not a sustainable payout ratio.
MO's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP60.92%
EPS Next 2Y5.4%
EPS Next 3Y4.74%
55.05
+0.72 (+1.33%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryTobacco
Earnings (Last)
Earnings (Next)
Inst Owners60.21%
Inst Owner Change0.21%
Ins Owners0.06%
Ins Owner Change0.4%
Market Cap93.07B
Analysts73.64
Price Target56.58 (2.78%)
Short Float %1.94%
Short Ratio4.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.61% |
Yearly Dividend3.96
Dividend Growth(5Y)4.03%
DP60.92%
Div Incr Years14
Div Non Decr Years14
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.75%
Min EPS beat(2)-2.78%
Max EPS beat(2)-0.72%
EPS beat(4)0
Avg EPS beat(4)-2.94%
Min EPS beat(4)-5.41%
Max EPS beat(4)-0.72%
EPS beat(8)0
Avg EPS beat(8)-2.94%
EPS beat(12)0
Avg EPS beat(12)-2.79%
EPS beat(16)1
Avg EPS beat(16)-2.56%
Revenue beat(2)0
Avg Revenue beat(2)-2.18%
Min Revenue beat(2)-2.59%
Max Revenue beat(2)-1.77%
Revenue beat(4)0
Avg Revenue beat(4)-3.04%
Min Revenue beat(4)-4.99%
Max Revenue beat(4)-1.77%
Revenue beat(8)0
Avg Revenue beat(8)-3.73%
Revenue beat(12)4
Avg Revenue beat(12)2.83%
Revenue beat(16)8
Avg Revenue beat(16)7.08%
PT rev (1m)-0.24%
PT rev (3m)7.68%
EPS NQ rev (1m)-1.03%
EPS NQ rev (3m)-0.63%
EPS NY rev (1m)-0.29%
EPS NY rev (3m)-0.21%
Revenue NQ rev (1m)-0.99%
Revenue NQ rev (3m)-1.71%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.73 | ||
| Fwd PE | 10.01 | ||
| P/S | 3.88 | ||
| P/FCF | 10.81 | ||
| P/OCF | 10.63 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.46 |
EPS(TTM)5.13
EY9.32%
EPS(NY)5.5
Fwd EY9.99%
FCF(TTM)5.09
FCFY9.25%
OCF(TTM)5.18
OCFY9.4%
SpS14.21
BVpS-1.32
TBVpS-13.1
PEG (NY)1.48
PEG (5Y)2.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 31.94% | ||
| ROE | N/A | ||
| ROCE | 44.41% | ||
| ROIC | 34.83% | ||
| ROICexc | 39.52% | ||
| ROICexgc | 274.39% | ||
| OM | 48.81% | ||
| PM (TTM) | 46.78% | ||
| GM | 59.71% | ||
| FCFM | 35.85% |
ROA(3y)22.85%
ROA(5y)16.84%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)34.47%
ROIC(5y)31.51%
ROICexc(3y)39.7%
ROICexc(5y)36.4%
ROICexgc(3y)241.36%
ROICexgc(5y)177.5%
ROCE(3y)43.94%
ROCE(5y)40.18%
ROICexcg growth 3Y39.16%
ROICexcg growth 5Y48.09%
ROICexc growth 3Y4.74%
ROICexc growth 5Y13.62%
OM growth 3Y3.13%
OM growth 5Y3.4%
PM growth 3Y70.3%
PM growth 5YN/A
GM growth 3Y3.41%
GM growth 5Y3.35%
F-Score7
Asset Turnover0.68
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 2.89 | ||
| Debt/EBITDA | 1.95 | ||
| Cap/Depr | 49.65% | ||
| Cap/Sales | 0.59% | ||
| Interest Coverage | 10.53 | ||
| Cash Conversion | 72.89% | ||
| Profit Quality | 76.64% | ||
| Current Ratio | 0.51 | ||
| Quick Ratio | 0.39 | ||
| Altman-Z | 4.52 |
F-Score7
WACC7.84%
ROIC/WACC4.44
Cap/Depr(3y)70.81%
Cap/Depr(5y)74.31%
Cap/Sales(3y)0.74%
Cap/Sales(5y)0.75%
Profit Quality(3y)109.56%
Profit Quality(5y)169.16%
High Growth Momentum
Growth
EPS 1Y (TTM)3.64%
EPS 3Y3.63%
EPS 5Y4.03%
EPS Q2Q%9.32%
EPS Next Y7.23%
EPS Next 2Y5.4%
EPS Next 3Y4.74%
EPS Next 5Y4.09%
Revenue 1Y (TTM)-1.9%
Revenue growth 3Y-2.62%
Revenue growth 5Y-0.89%
Sales Q2Q%1.63%
Revenue Next Year-0.14%
Revenue Next 2Y0.34%
Revenue Next 3Y0.28%
Revenue Next 5Y1.31%
EBIT growth 1Y-2.01%
EBIT growth 3Y0.42%
EBIT growth 5Y2.48%
EBIT Next Year4.99%
EBIT Next 3Y3.08%
EBIT Next 5Y2.02%
FCF growth 1Y-5.28%
FCF growth 3Y1.5%
FCF growth 5Y2.55%
OCF growth 1Y-5.75%
OCF growth 3Y1.36%
OCF growth 5Y2.24%