Altria Group Inc.
) has hiked its quarterly dividend by 9.1% to 48 cents per share
payable on Oct, 2013 to shareholders as of Sept 16, 2013. The new
raise brings the annualized dividend rate of Altria to $1.92 per
share. Last year, Altria had raised its dividend by 7.3%.
Altria regularly returns value to its shareholders. Since the
spin off of
Philip Morris International Inc
) in 2008, Altria increased its dividend every year. Moreover,
Altria has increased its dividend 47 times in the last 44 years.
The company has a dividend payout ratio target of around 80% of
its adjusted earnings per share.
Besides dividend,Altria has announced that it will enhance its
share buyback plan by $700 million to $1 billion in a year from
the current annual buyback plan of $300 million.
The recent hike in dividend and enhanced share buyback program
reflects the company's strong cash position. As of the recently
concluded second quarter, Altria held $2.6 billion cash and cash
equivalents compared to $3.8 billion as of the prior quarter.
Long-term debt as of Mar 31, 2013, stood at $12.9 billion
compared to $11.9 billion in Mar 31, 2013.
In Jul 2013, Altria reported its second-quarter earnings of 62
cents per share in the missing the Zacks Consensus Estimate by a
penny. However, the results exceeded the prior-year quarter's
earnings of 59 cents by 5.1%.
The earnings upswing came from higher operating income in the
smokeable and smokeless products segments, lower interest and
other debt expense and lower outstanding shares.
During the second quarter, Altria repurchased 3.7 million
shares at a total cost of approximately $135 million under its
current $300 million share buyback plan.
Altria Group, like its peers
Reynolds American Inc.
), is diversifying its product portfolio due to declining
smokeable cigarette volumes. Smokeless products and e-cigarettes
are the key product categories which can drive long-term growth.
The recent launch of Mark ten e-cigarettes is particularly
encouraging for Altria's foray into the fast growing e-cigarette
category will yield high sales in the coming quarters. Moreover,
positive pricing will help Altria offset the volume drag and
achieve the overall sales growth. Altria holds a Zacks Rank #3
LORILLARD CO (LO): Free Stock Analysis Report
ALTRIA GROUP (MO): Free Stock Analysis Report
PHILIP MORRIS (PM): Free Stock Analysis
REYNOLDS AMER (RAI): Free Stock Analysis
To read this article on Zacks.com click here.