PM - Altria: Top 7 Drivers Of Growth That Mr. Market Doesn't Care About
2024-01-28 20:41:24 ET
Summary
- Critics ask why buy Altria for its yield when the stock gives it all away to price depreciation.
- The answer is Altria has been hit by an adverse macro environment in 2023 which is about to reverse. This could see Altria turning around and again appreciate.
- I've identified a total of 7 drivers of long-term growth, which I believe will serve to prove critics wrong in the long run.
Altria Group, Inc. ( MO ) attracts a lot of interest for its high dividend yield. Many investors - including users here on Seeking Alpha - who don't already hold it seem at least interested in holding the stock for the yield.
But skeptics have been increasingly asking one question in particular: Why hold a stock for its ~9% yield only to give it away as the share price declines at the same rate?
Certainly, over the past year, this has been precisely what happened.
Investors who bought a year ago will have given their dividend away to price depreciation:
I think the price drop was caused primarily by rising interest rates. As I will discuss further in this analysis, rising interest rates have hurt not just Altria but dividend stocks in general....
Altria: Top 7 Drivers Of Growth That Mr. Market Doesn't Care About