Altria Group Inc (NYSE:MO) Analysis: A High-Yield Dividend Stock for Income Investors

For investors looking for steady income from dividend stocks, a methodical screening process can find firms that mix good yields with sound finances. One useful technique uses filters for securities with high dividend grades while keeping acceptable profit and condition measures. This process focuses on lasting distributions by confirming firms have enough earning ability and monetary strength to continue their dividends during different economic periods. The screening rules usually involve minimum levels for dividend caliber, profit figures, and financial condition markers to remove firms with uncertain distribution longevity.

Dividend Profile Analysis

ALTRIA GROUP INC (NYSE:MO) makes a strong case for dividend-oriented investors, especially when measured against the screening rules made to find persistent income producers. The firm's dividend traits are notable in multiple important areas:

• Good Yield: The stock provides a large yearly dividend yield of 7.48%, much higher than the industry average of 4.21% and the S&P500 average of about 2.38%. This places Altria as a high-yield option within the income investment field.
• Dependable Payment Record: Altria shows a history of regular dividend payments covering at least ten years without cuts, giving investors assurance in the firm's dedication to giving capital back to shareholders.
• Dividend Increase: The firm has kept a small but stable yearly dividend growth rate of 4.03%, showing a habit of slowly raising distributions over time instead of irregular payment patterns.

These dividend qualities match the screening system's focus on finding firms with both good current income and dependable payment histories, which are important for creating a lasting dividend portfolio.

Profitability Evaluation

The screening need for satisfactory profit finds solid backing in Altria's basic profile, with the firm getting a high profit grade of 9 out of 10. This solid profit supplies the key earning base that backs dividend longevity:

• High Returns: The firm produces notable returns on assets (25.26%) and invested capital (35.73%), putting it in the best group of its industry equals and showing effective use of shareholder capital.
• Good Margins: Altria keeps high profit margins with an operating margin of 52.01% and profit margin of 37.78%, both ranking at the top of its industry and displaying betterment patterns in recent years.
• Cash Flow Production: The firm has regularly reported positive cash flow from operations over the past five years, supplying the needed liquidity to finance dividend payments without stressing monetary resources.

This profit strength directly backs the screening idea that firms with significant earning ability are in a better position to maintain and raise their dividends, even during difficult economic times.

Financial Condition Factors

While the screening process stresses financial condition as a protection for dividend longevity, Altria shows a varied image with a condition grade of 5 out of 10. The firm displays several positive solvency signs but deals with difficulties in liquidity handling:

• Solvency Soundness: Altria keeps a sound Altman-Z score of 4.69, showing low short-term bankruptcy danger and doing better than most industry rivals. The acceptable debt-to-free-cash-flow ratio of 2.80 indicates the firm could pay back its debts in about three years using present cash flow levels.
• Liquidity Issues: The firm shows weakness in short-term monetary flexibility with current and quick ratios under 1.0, showing possible troubles in meeting immediate debts without extra financing.
• Capital Planning: Altria has successfully lowered its share count over both one-year and five-year spans, showing orderly capital distribution that helps current shareholders.

These condition numbers emphasize why the screening system includes financial condition limits, to find firms that, while not necessarily flawless in all measures, keep enough steadiness to support continuing dividend promises.

Valuation and Growth Setting

From a valuation angle, Altria seems fairly valued with a grade of 8 out of 10, trading at a P/E ratio of 10.59 that is under both industry and S&P500 averages. The firm's growth profile, however, stays modest with a grade of 3 out of 10, showing the developed state of its main tobacco business. Income has displayed small decrease in recent periods, though analysts predict leveling with small forward growth expectations. For dividend investors focusing on income over fast capital gain, this valuation-growth situation may show a suitable balance given the large yield and payment dependability.

Longevity Factors

The main worry for dividend investors centers on distribution longevity, with Altria setting aside about 78% of earnings to dividend payments. This high distribution ratio nears levels that may limit monetary flexibility if earnings meet sudden stress. Also, the dividend growth rate has lately moved faster than earnings growth, creating a possible longevity difference that needs watching. These items highlight the value of the screening system's balanced process, which looks at multiple basic features beyond dividend yield alone.

For investors wanting to find comparable dividend options, more screening outcomes can be found using the Best Dividend Stocks screener, which uses similar rules to find firms balancing good yields with monetary steadiness.

Disclaimer: This analysis uses basic data and screening systems for information only and is not investment guidance. Investors should do their own study and think about their personal monetary situation before making investment choices. Dividend payments are not certain and may change based on firm results and board choices.