Stock Analysis: Best Dividend Stocks

Fundamental Rating

Taking everything into account, MO scores 6 out of 10 in our fundamental rating. MO was compared to 8 industry peers in the Tobacco industry. While MO has a great profitability rating, there are some minor concerns on its financial health. MO is valued quite cheap, but it does not seem to be growing. Finally MO also has an excellent dividend rating. With these ratings, MO could be worth investigating further for value and dividend investing!.

1. Profitability

1.1 Basic Checks

In the past year MO was profitable.

In the past year MO had a positive cash flow from operations.

MO had positive earnings in each of the past 5 years.

Each year in the past 5 years MO had a positive operating cash flow.

1.2 Ratios

Looking at the Return On Assets, with a value of 31.94%, MO belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.

MO has a better Return On Invested Capital (34.88%) than 100.00% of its industry peers.

MO had an Average Return On Invested Capital over the past 3 years of 34.24%. This is significantly above the industry average of 16.80%.

The 3 year average ROIC (34.24%) for MO is below the current ROIC(34.88%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	31.94%
ROE	N/A
ROIC	34.88%

ROA(3y)22.85%

ROA(5y)16.84%

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)34.24%

ROIC(5y)31.38%

1.3 Margins

MO has a better Profit Margin (46.78%) than 100.00% of its industry peers.

In the last couple of years the Profit Margin of MO has grown nicely.

MO has a better Operating Margin (48.87%) than 100.00% of its industry peers.

In the last couple of years the Operating Margin of MO has grown nicely.

MO has a better Gross Margin (59.71%) than 75.00% of its industry peers.

In the last couple of years the Gross Margin of MO has grown nicely.

		Industry Rank	Sector Rank
OM	48.87%
PM (TTM)	46.78%
GM	59.71%

OM growth 3Y2.47%

OM growth 5Y3%

PM growth 3Y70.3%

PM growth 5YN/A

GM growth 3Y3.41%

GM growth 5Y3.35%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MO is creating value.

Compared to 1 year ago, MO has less shares outstanding

MO has less shares outstanding than it did 5 years ago.

The debt/assets ratio for MO is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 4.65 indicates that MO is not in any danger for bankruptcy at the moment.

MO has a better Altman-Z score (4.65) than 100.00% of its industry peers.

MO has a debt to FCF ratio of 2.89. This is a good value and a sign of high solvency as MO would need 2.89 years to pay back of all of its debts.

Looking at the Debt to FCF ratio, with a value of 2.89, MO belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	N/A
Debt/FCF	2.89
Altman-Z	4.65

ROIC/WACC4.45

WACC7.84%

2.3 Liquidity

A Current Ratio of 0.51 indicates that MO may have some problems paying its short term obligations.

The Current ratio of MO (0.51) is worse than 87.50% of its industry peers.

A Quick Ratio of 0.39 indicates that MO may have some problems paying its short term obligations.

MO has a Quick ratio of 0.39. This is amonst the worse of the industry: MO underperforms 87.50% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.51
Quick Ratio	0.39

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 5.89% over the past year.

The Earnings Per Share has been growing slightly by 4.03% on average over the past years.

The Revenue has decreased by -1.90% in the past year.

The Revenue has been decreasing by -0.89% on average over the past years.

EPS 1Y (TTM)5.89%

EPS 3Y3.63%

EPS 5Y4.03%

EPS Q2Q%6.96%

Revenue 1Y (TTM)-1.9%

Revenue growth 3Y-2.62%

Revenue growth 5Y-0.89%

Sales Q2Q%-4.2%

3.2 Future

MO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.45% yearly.

Based on estimates for the next years, MO will show a small growth in Revenue. The Revenue will grow by 0.96% on average per year.

EPS Next Y6.75%

EPS Next 2Y5.05%

EPS Next 3Y4.24%

EPS Next 5Y3.45%

Revenue Next Year-0.44%

Revenue Next 2Y-0.12%

Revenue Next 3Y-0.19%

Revenue Next 5Y0.96%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 11.44 indicates a reasonable valuation of MO.

75.00% of the companies in the same industry are more expensive than MO, based on the Price/Earnings ratio.

Compared to an average S&P500 Price/Earnings ratio of 28.22, MO is valued rather cheaply.

The Price/Forward Earnings ratio is 10.53, which indicates a very decent valuation of MO.

Compared to the rest of the industry, the Price/Forward Earnings ratio of MO indicates a rather cheap valuation: MO is cheaper than 87.50% of the companies listed in the same industry.

The average S&P500 Price/Forward Earnings ratio is at 20.86. MO is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	11.44
Fwd PE	10.53

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, MO is valued cheaply inside the industry as 87.50% of the companies are valued more expensively.

87.50% of the companies in the same industry are more expensive than MO, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	11.66
EV/EBITDA	10.12

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.

MO has an outstanding profitability rating, which may justify a higher PE ratio.

PEG (NY)1.69

PEG (5Y)2.84

EPS Next 2Y5.05%

EPS Next 3Y4.24%

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5. Dividend

5.1 Amount

MO has a Yearly Dividend Yield of 6.90%, which is a nice return.

Compared to an average industry Dividend Yield of 3.99, MO pays a better dividend. On top of this MO pays more dividend than 87.50% of the companies listed in the same industry.

Compared to an average S&P500 Dividend Yield of 2.44, MO pays a better dividend.

		Industry Rank	Sector Rank
Dividend Yield	6.9%

5.2 History

The dividend of MO has a limited annual growth rate of 4.03%.

MO has been paying a dividend for at least 10 years, so it has a reliable track record.

MO has not decreased their dividend for at least 10 years, which is a reliable track record.

Dividend Growth(5Y)4.03%

Div Incr Years14

Div Non Decr Years14

5.3 Sustainability

MO pays out 60.92% of its income as dividend. This is not a sustainable payout ratio.

The dividend of MO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.

DP60.92%

EPS Next 2Y5.05%

EPS Next 3Y4.24%

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New York Stock Exchange, Inc. / Consumer Staples / Tobacco

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

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2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

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3. Growth

3.1 Past

3.2 Future

3.3 Evolution

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4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

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5. Dividend

5.1 Amount

5.2 History

5.3 Sustainability

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