Dividend stock to watch: The largest U.S. tobacco company – Altria Group, Inc (MO) on Tuesday released the its second-quarter earnings report. The data show that, the level of profitability was equivalent to nearly three times the same period last year, thanks to revenue growth, .
Altria Group announced said in the earnings report that, in the second quarter, the company’s operating income grew 9.6%, and net profit is nearly three time the same period, from $444 million to $1.23 billion; earnings per share increased to 60 cents from 21 cents a year earlier. The earnings data also show that Adjusted earnings per share increased to 59 cents from 54 cents a year earlier.
According to the survey by the market research firm FactSet Research, analysts had averagely estimated the company would post earnings per share of 57 cents.
For the current fiscal year guidance, Altria Group expects earnings per share will reach $2.29 to $2.33, slightly different from the previously estimated range of $2.28 to $2.34. On the basis of the adjustment in performance, Altria Group expects 2012 earnings per share of $2.19 to $2.33, versus the previously estimated range of $2.17 to $2.23. Analysts polled by FactSet Research on average estimate earnings per of $2.21.
Altria Group returns cash to the shareholders at a dividend yield of 4.60% and at a payout ratio of 98.00%. The company has been paying dividends since 1928 and growing its payouts for 46 consecutive years.
MO stock price edged up 0.23%, or $0.08, to close at $35.57 Tuesday on volume of 10.66 million shares versus the daily average of 9.78 million shares. The stock has gained more than 19% since the beginning of this year and is currently above its 50-day moving average of $33.63 and 200-day moving average of $30.43. The dividend stock trades modestly at a trailing P/E multiple of 21.38 versus the peer group average of 21.14x; from another perspective, the stock is priced slightly expensively at a PEG ratio of 2.66 versus the peer group average of 1.85. Altria Group currently has a market cap of $72.38 billion. According to the data provided by FactSet Research, 16 analysts on average gave the dividend stock a “Overweight” rating.