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Altria Group, Inc. (MO)

Company Dividend Discount ModelIndustry: TobaccoSector: Consumer Defensive

Valuation Snapshot

Stable Growth$48.74 - $74.73$60.86
Multi-Stage$73.26 - $79.98$76.56
Blended Fair Value$68.71
Current Price$66.06
Upside4.01%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS2.44%5.81%4.064.023.913.823.733.603.212.852.672.48
YoY Growth--0.97%2.73%2.37%2.48%3.64%12.08%12.65%6.54%7.97%7.37%
Dividend Yield--6.76%9.29%8.76%7.31%7.28%9.30%5.56%4.57%3.74%3.95%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)8,869.00
(-) Cash Dividends Paid (M)8,385.00
(=) Cash Retained (M)484.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)1,773.801,108.63665.18
Cash Retained (M)484.00484.00484.00
(-) Cash Required (M)-1,773.80-1,108.63-665.18
(=) Excess Retained (M)-1,289.80-624.63-181.18
(/) Shares Outstanding (M)1,688.001,688.001,688.00
(=) Excess Retained per Share-0.76-0.37-0.11
LTM Dividend per Share4.974.974.97
(+) Excess Retained per Share-0.76-0.37-0.11
(=) Adjusted Dividend4.204.604.86
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate0.44%1.44%2.44%
Fair Value$48.74$60.86$74.73
Upside / Downside-26.23%-7.87%13.12%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)8,869.008,996.339,125.499,256.509,389.409,524.209,809.92
Payout Ratio94.54%93.63%92.73%91.82%90.91%90.00%92.50%
Projected Dividends (M)8,385.008,423.658,461.678,499.058,535.768,571.789,074.18

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate0.44%1.44%2.44%
Year 1 PV (M)7,645.057,721.177,797.29
Year 2 PV (M)6,969.757,109.237,250.09
Year 3 PV (M)6,353.496,545.166,740.65
Year 4 PV (M)5,791.146,025.256,266.39
Year 5 PV (M)5,278.055,546.095,824.91
PV of Terminal Value (M)91,626.7896,279.98101,120.35
Equity Value (M)123,664.26129,226.89134,999.69
Shares Outstanding (M)1,688.001,688.001,688.00
Fair Value$73.26$76.56$79.98
Upside / Downside10.90%15.89%21.07%

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