Altria Group manufactures and sells cigarettes, smokeless products, and wine in the United States and internationally. The company was founded in 1919 and is based in Richmond, Virginia.
MO Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Altria Group Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Altria Group Inc ranked in the 68th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 167.17% on a DCF basis. The most interesting components of our discounted cash flow analysis for Altria Group Inc ended up being:
The compound growth rate in the free cash flow of Altria Group Inc over the past 5.75 years is 0.16%; that's better than 59.31% of cash flow producing equities in the Consumer Defensive sector, where it is classified.
Altria Group Inc's effective tax rate, as measured by taxes paid relative to net income, is at 47 -- greater than 93.8% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Altria Group Inc? See BGS, RELV, SIAF, TAP, and CHEF.
Juul Labs Inc said on Thursday it submitted an application to the U.S. Food and Drug Administration that would allow it to keep selling e-cigarettes, which face heightened scrutiny over a surge in teenage vaping. The company, in which Altria Group owns a 35% stake, has provided scientific data from over 110 studies evaluating the product's impact on tobacco users and non-users, including those who are underage. Vaping companies are required by the FDA to provide a Premarket Tobacco Product Application (PMTA), which will include scientific data to show a product is appropriate for public consumption.
Verizon (NYSE: VZ) and Altria (NYSE: MO) are two different types of companies that attract investors for similar reasons: stability and dividends. Verizon, one of the top telecom companies in America, pays a forward dividend yield of 4.3% and trades at just 12 times forward earnings. Altria, the country's largest tobacco company, pays an even higher forward yield of 8% while trading at an even lower forward P/E of 10.