The market continues to set new highs, which has me even
more hesitant to add more capital to an already overvalued market. If you look
at the SPDR S&P 500 (SPY) and the Invesco QQQ ETF (QQQ), which are both
indexes that represent a good portion of the entire market, the weekly and
monthly chart of these indexes show us how extended the overall market is.
However, it’s not a stock market but a market of stocks. With this kind of
mindset, we can still find diamonds in the rough. There a still a hand full of high-quality
stocks that are still consider undervalued in this inflated market. We have
discussed a few already, and they still present a good opportunity. In today’s
post, we will discuss another undervalued company, Altria Group (MO), with a
current dividend yield of 7.24% and has been growing its dividends for over 51
consecutive years making the stock a Dividend King.
Overview of Altria – A Dividend King
Altria Group, Inc.
(MO) is an American corporation and one of the world’s largest producers and
marketers of tobacco, cigarettes, and related products. It operates worldwide
and is headquartered in unincorporated Henrico County, Virginia. The company’s
brands include Marlboro, Copenhagen, Skoal, Black and Mild, IQOS, and several
others. Altria recently inked a deal to sell the Ste. Michelle wine brand for
$1.2 billion. Altria also has several large investments including a ~$16.7
billion stake in AB InBev (BUD), the global beer company; equity investment in
JUUL, the U.S. e-vapor leader; and a 45% stake in Cronos Group, a cannabis
company. Altria has a warrant to purchase an additional 10% stakes in Cronos.
Today, the Company has a market capitalization of about $88.5 billion and
currently trades hands for ~$47.53 per share as of this writing.
Since June 2017, Altria Group has been on a downtrend. In
June 2017, the company hit an all-time high, trading for $77.79 per share.
Since then, the Company’s stock price has been heading lower while Altria’s
dividend yield has been heading higher. When the COVID-19 pandemic hit, the
stock price hit a low of $30.95 per share. It has now broken that downward
trend and looks to continue to go higher. Below you can see the trend line that
Altria has broken on the monthly chart. I will cover the many reasons why this
Dividend King, Altria, is an excellent buy at the current market price.
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