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Tickers in this Article: MO, CTB, HOG, M, TTM, C
Dividend stocks can be a comfort to many an investor. For retirees, they provide a steady stream of income, and for regular investors they provide downside protection.

The trouble with dividends however, is that they aren't guaranteed, and companies that pay them could reduce payments or even suspend them in tough times, as investors of Citigroup (NYSE:C) recently found out. (To learn more, read Is Your Dividend At Risk?.)

On the flip side, a steadily increasing dividend is a sign of company health. I set out on a search for well-known companies that have a high current dividend yield. Below are some top prospects. In this article I'll take a closer look at Altria (NYSE:MO).

Dividend Darlings
Company Name
Market Cap
Current Dividend Yield
Cooper Tire
$276 M
Altria Group
$31.09 B
Harley Davidson
$3.71 B
Tata Motors
$1.69 B
$3.71 B
Data retrieved December 3, 2008 from screen

Altria Group
Virginia-based Altria is perhaps best known for its subsidiary Philip Morris USA and its cigarettes which include well-known brands such as Parliament, Virginia Slims and Marlboro. Since the Philip Morris spinoff, the stock is down about 36% from its 52-week high, but now is not the time to count out Altria. Despite the current economic crisis, and perhaps because of it, people will keep smoking.

Altria is coming off a decent third quarter where adjusted earnings from continuing operations came in at 46 cents per share, which was two cents north of expectations. Its sales also rose 5% to just over $5.2 billion. A 5% increase is quite good for a company of this size. Unlike many other companies, Altria is not reducing its earnings forecast. The latest prediction is $1.63-1.67 for 2008's adjusted full-year diluted EPS. That's consistent with prior guidance. (For added insight, read Can Earnings Guidance Accurately Predict The Future?)

Analysts expect Altria to earn $1.66 a share in the current year and $1.82 a share 2009, according to Yahoo Finance. For a company that trades below $16 per share, that is eye catching. It can be had for about 9.3 times the current year estimate, yet its expected to grow its EPS 9.6% from 2008 to 2009. With a tobacco stock like Altria, investors should always be aware of the constant risk of litigation. The awards can be quite substantial.

As for the dividend, the current yield was in excess of 8%. There's no guarantee when it comes to dividends, but that is quite simply an attractive yield.

Bottom Line
I think Altria deserves a closer look. In my mind the company has solid long-term potential. I'm also impressed by its attractive multiple based on the current year estimate and its lofty dividend.

Dividends are an attractive feature for income seekers and may provide an element of security. However, investors of all stripes should understand that they are in no way guaranteed and in difficult times companies may cut them or suspend them as a means of saving money.

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