Altria (MO)

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Altria (MO)

Berichtdoor No Refunds » 30 Aug 2013 15:58

Altria (NYSE: MO) heeft een moeilijk jaar gehad, aangezien de dalende consumptie van sigaretten in de VS onlangs versneld is door de groeiende adoptie van e-sigaretten. Het verkoopsvolume daalde 6% op jaarbasis voor de eerste helft van dit jaar. Als gevolg hiervan, verkondigde Altria haar binnenkomst in de opkomende categorie dit jaar. Het lanceerde de Mark-Ten e-sigaret via een van haar dochterondernemingen, NUMARK. Dit is een positieve stap en weerspiegelt de focus van het management op het creëren van duurzame waardecreatie op lange termijn voor zijn aandeelhouders te midden van een snel dalende markt voor sigaretten.

Altria kan geschat 5 miljard dollar aan waarde toevoegen door de verkoop van e-sigaretten. Het grootste deel van de waarde wordt verwacht van de snel groeiende markt voor e-sigaretten, en het bedrijf heeft expertise in het opbouwen van merken en het hanteren van tabak rechtszaken. Schadelijke gevolgen voor de gezondheid en de hoge accijnzen op traditionele sigaretten drijven de consument naar deze niche categorie. Bovendien bieden e-sigaretten de consument een goedkopere manier om hun nicotineverslaving te voeden. Op $ 500 miljoen in 2012 is de markt voor deze damp apparaten stijgende en zal naar verwachting verdubbelen tot 1 miljard dollar in 2013.

Het verkoopsvolume van de traditionele sigaretten in de VS zal blijven dalen op de lange termijn door de groei van alternatieven en de stijgende accijnzen. Een benadering van de grootte van de e-sigaret markt, verwacht ik dat 75% van de daling van de traditionele volume sigaret wordt omgezet in e-sigaret consumptie op de lange termijn. Bij een veronderstelde gemiddelde prijs van $ 3 per eenheid, inclusief lader en accu prijzen, kan dit oplopen tot een markt van $ 10 miljard in 2020.

Hoewel Altria zijn eerste e-sigaret merk nog over heel de VS moet lanceren, verwacht ik dat het bedrijf langzaam zal groeien tot een marktaandeel van 10% door de lange termijn op de hoge marketing en brand building mogelijkheden. Het bedrijf heeft het al eerder gedaan met Marlboro, waarvan meer dan 40% van de traditionele sigaret markt bezit, en kan mogelijk het opnieuw doen.

Cash EBITDA-marge wordt ook verwacht te groeien naar het bedrijfsbrede gemiddelde op de lange termijn op het vergroten van de capaciteit en door marging kosten te verminderen. Indirecte kaskosten, kapitaaluitgaven, belastingen en verandering in het netto werkkapitaal, kunnen gemiddeld tot ongeveer 35% van de contante EBITDA voor Altria omvatten. Op basis van al deze veronderstellingen zoals gewogen gemiddelde kapitaalkosten (WACC) van 7% en een terminal groei van 3%, denk ik dat Altria in de e-sigaretten markt een marktwaarde van $ 5 miljard kan behalen.
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Re: Altria (MO)

Berichtdoor No Refunds » 30 Aug 2013 19:03

Altria Group: Dividend Investors Pay A Premium For Dividend Stream

Altria Group, Inc. (MO) shareholders cheer the 9.1% increase in the quarterly dividend to $0.48 per share. The new annualized dividend stands at $1.92 per common share and the forward dividend yield at 5.71% based on a current share price of $33.60. Dividends have now been raised 47 times in the last 44 years. In addition the board of directors authorized an additional $700 million share buyback to supplement the $300 million repurchase plan already in existence. Altria aims to pay out about 80% of its adjusted diluted EPS.

While share buybacks, high payout ratios and dividends are attractive to income-oriented investors, it is also important to consider the price to be paid for such an income stream. Both market and free cash flow valuation approaches below show that investors do not get a bargain at Altria's current share price. Altria's peer comparison indicates its valuation is fairly average. Based on a free cash flow to equity approach the stock is overvalued.

Leading share price performance

Compared to competitor firms Philip Morris (PM) and Lorillard (LO) Altria shares have performed well over the last two years leading the peer group with a capital gain of just under 30%. Philip Morris came in second with around 20% and Lorillard with about 10%. While Altria has relatively outperformed Philip Morris and Lorillard in the past, valuations have now converged.

Peer group valuation

The peer group comparison below shows that shares are trading in a narrow range of around 12-13.65 times forward earnings. Only slight differences in valuation can be attested to. On a forward P/E basis Lorillard is the cheapest with a ratio of 11.97. Altria group trades at just a 1.6% premium to the peer group average and has the highest PEG ratio of 1.97 of all stocks reviewed. Altria also trades at a 28% premium to the peer group average PEG ratio. All stocks have a similar dividend yield ranging from 4-5%. With all stocks trading in the same range and at reasonable multiples, none of the companies appear to be extraordinarily cheap.

Free cash flow valuation

To focus more on the fundamentals of a company I look at free cash flow to equity. I estimate that Altria can earn about $2.05 in free cash flow per share in 2014. Applying FCF growth rates of 4.88% and 4.65% in 2015 and 2016 and a terminal value perpetual growth rate of 3% the intrinsic value for Altria stands at $30.20 per share (capital costs 10%). Considering a current share price of $33.60 Altria shares are overvalued by about 10%.

Challenges

Clearly tobacco companies must invent new ways to expand business and grow equity valuation. Positive growth in the tobacco segment is likely to come only from emerging markets where per capita cigarette consumption is higher than in Western countries and growing as well. Additionally, industrialized nations put emphasis on smoking-related health care costs, limit distribution to minors and implement otherwise restrictive tobacco advertising regulation. All these factors limit market size and do not justify premium multiples for tobacco firms.

The e-cigarette segment in particular can contribute to diversify the product mix and mitigate regulatory risk. I estimate this segment to be the primary growth driver over the next decade. Dividend distributions will ultimately depend on whether traditional tobacco companies can reinvent themselves and transition to products that offer consumers a better value proposition with alternative nicotine delivery products.

Bottom line

Free cash flow is likely to come in at around $1.90 a share this year giving shares a P/FCF multiple of 17.70 and making Altria anything else but cheap. I also estimate that Altria earns $2.25 per share in 2014 giving the stock a forward P/E ratio of nearly 15.

Though the past dividend record is attractive to income-oriented investors, it should be clear that Altria is really not trading in bargain territory at current share prices and is likely to be slightly overvalued. A pullback in share price, however, implies a better entry point to purchase Altria shares at a greater free cash flow yield.


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Re: Altria (MO)

Berichtdoor No Refunds » 11 Sep 2013 14:55

Altria Group Inc (NYSE:MO) showed a volume of 34.67 million shares by the end of last trade whereas the average volume of the stock remained 8.94 million shares. The 52 week range of the stock remained $30.01 – $37.61. The stock opened the session at $34.67 but then moved to $34.98. At that price, the stock showed a positive performance of 1.13%.Altria Group, Inc. is a holding company. At December 31, 2012, Altria Group, Inc.’s direct and indirect wholly owned subsidiaries included Philip Morris USA Inc. (PM USA), which is engaged in the manufacture and sale of cigarettes and certain smokeless products in the United States; John Middleton Co. (Middleton), which is engaged in the manufacture and sale of machine-made cigars and pipe tobacco

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Re: Altria (MO)

Berichtdoor No Refunds » 12 Sep 2013 09:43

Altria Group Target of Unusually High Options Trading (MO)

Altria Group (NYSE:MO) was the recipient of unusually large options trading activity on Wednesday. Stock investors acquired 10,286 put options on the stock, Stock Ratings Network reports. This represents an increase of approximately 174% compared to the average volume of 3,756 put options.

Several analysts have recently commented on the stock. Analysts at Zacks reiterated a “neutral” rating on shares of Altria Group (NYSE:MO) in a research note to investors on Wednesday. They now have a $37.00 price target on the stock. Separately, analysts at TheStreet reiterated a “buy” rating on shares of Altria Group (NYSE:MO) in a research note to investors on Tuesday, September 3rd. Finally, analysts at TheStreet reiterated a “buy” rating on shares of Altria Group (NYSE:MO) in a research note to investors on Friday, August 23rd.

Six research analysts have rated the stock with a hold rating and seven have given a buy rating to the company’s stock. The company presently has an average rating of “Buy” and an average price target of $37.00.

Shares of Altria Group (NYSE:MO) traded up 1.23% during mid-day trading on Wednesday, hitting $35.41. The stock had a trading volume of 12,971,073 shares. Altria Group has a 1-year low of $30.01 and a 1-year high of $37.61. The stock has a 50-day moving average of $34.75 and a 200-day moving average of $35.3. The company has a market cap of $70.891 billion and a price-to-earnings ratio of 15.99.

Altria Group (NYSE:MO) last posted its quarterly earnings results on Tuesday, July 23rd. The company reported $0.62 EPS for the quarter, missing the Thomson Reuters consensus estimate of $0.63 by $0.01. The company had revenue of $4.53 billion for the quarter, compared to the consensus estimate of $4.62 billion. During the same quarter in the prior year, the company posted $0.59 earnings per share. The company’s quarterly revenue was down 1.2% on a year-over-year basis. On average, analysts predict that Altria Group will post $2.39 earnings per share for the current fiscal year.

The company also recently announced a quarterly dividend, which is scheduled for Thursday, October 10th. Investors of record on Monday, September 16th will be paid a dividend of $0.48 per share. This represents a $1.92 annualized dividend and a dividend yield of 5.42%. The ex-dividend date is Thursday, September 12th. This is an increase from Altria Group’s previous quarterly dividend of $0.44.

Altria Group, Inc is a holding company. At December 31, 2012, Altria Group, Inc’s direct and indirect wholly owned subsidiaries included Philip Morris USA Inc (NYSE:MO), which is engaged in the manufacture and sale of cigarettes and certain smokeless products in the United States; John Middleton Co (Middleton), which is engaged in the manufacture and sale of machine-made cigars and pipe tobacco, and is a wholly owned subsidiary of PM USA; and UST LLC (UST), which through its direct and indirect wholly owned subsidiaries, including U.


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Re: Altria (MO)

Berichtdoor No Refunds » 20 Sep 2013 15:40

Altria Group Inc (NYSE:MO) Revises 2013 Full Year Reported EPS Guidance

Altria Group Inc (NYSE:MO) has revised its previously announced full year EPS to be in the range of $2.57 to $2.62, the earlier guidance was $2.51 to $2.56. These changes are aimed at reflecting the Sept. 11 decision which the arbitration panel made, that was presiding over the non participating manufacturer adjustment dispute. There have been massive challenges for the tobacco industry in the US which have not affected Altria Growth.

As a result of the verdict from the arbitration panel, Altria’s subsidiary Philip Morris USA Inc is expected to be credited with credit totaling $145million plus interests. The revised guidance integrates the reversal of tax accruals that are no longer required. Despite the revised changes, Altria still reaffirmed its previous guidance for full year adjusted EPS to be in the range of $2.36 to $2.41, which specifically excludes special items. This will essentially represent a growth rate of 7% to 9% for the diluted EPS base of $2.21 per share in 2012.

Altria Group currently boosts as being the largest tobacco company in the US with a market share of over 50% for its smokeless tobacco products and cigarettes. Some of its well known portfolios include the well known Marlboro, Copenhagen, Skoal and Black and mild. It also owns market premium wines sold under various labels such as Chateau Ste. It is estimated that Smokeless tobacco products form a key factor in Altria annual revenue totaling up to 85% of the stock price

The consistent demand of Altria’s products can be attributed to the additive nature of the products and customer loyalty to its wide range of products. The Company estimates a whopping $1 billion e-cigarette market that it would love to highly concentrate on to boost its annual revenue. This clearly indicates a plenty of scope that the company can use for its growth


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Re: Altria (MO)

Berichtdoor No Refunds » 04 Nov 2013 22:47

We continue to prefer domestic peer Altria (MO), as its annual dividend yield of 5.4% is not only better than Philip Morris International's 4.3% mark (at the time of this writing), but the former continues to raise it at a nice clip and holds a prized 27% ownership stake in SABMiller, which continues to perform well. SABMiller currently sports an R800 billion market capitalization (or about $80 USD at current exchange rates), which means Altria is effectively sitting on $21.6 billion in potential cash (about 30% of its market capitalization)* at current price levels. We think this hidden asset within Altria's portfolio is the primary difference between our fair value of Altria and its market price.


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Re: Altria (MO)

Berichtdoor No Refunds » 04 Feb 2014 16:06

Altria acquiring e-cig maker Green Smoke

Altria Group Inc. is pushing further into the electronic cigarette business by acquiring e-cigarette maker and distributor Green Smoke Inc.

The Henrico County-based company, which owns Philip Morris USA, is buying Green Smoke for $110 million and up to $20 million in incentive payments. The deal should close in the second quarter.

Altria got into the e-cigarette business in August when its Nu Mark subsidiary began testing its own product under the MarkTen brand in Indiana. The company expanded that test in December to Arizona with a new flavor system and packaging.

“Adding Green Smoke’s significant e-vapor expertise and experience, along with its supply chain, product lines and customer service, will complement Nu Mark’s capabilities and enhance its competitive position,” said Marty Barrington, Altria’s chairman and CEO, on Monday. “Green Smoke’s culture of innovation and history of producing high-quality products are consistent with Altria’s culture.”

Most of Green Smoke’s e-cigarettes are sold online. “They do have some distribution through traditional (stores), but the majority is online,” an Altria spokesman said.

Green Smoke, which was founded in 2008 and has operations in the U.S. and Israel, generated revenue of about $40 million in 2013, Altria said.

Green Smoke sells disposable e-cigarette types and rechargeable, reusable devices in a number of flavors.

Unlike conventional cigarettes, e-cigarettes do not burn tobacco or contain tobacco leaf. The battery-powered devices heat a liquid solution of water, nicotine and flavorings, creating a vapor that is inhaled by the smoker, or “vaper.”

Altria said last week that its MarkTen test is off to a strong start. The e-cigarette products are available in 1,900 Arizona stores and about 3,000 locations in Indiana.

“Nu Mark is making good progress in understanding adult smokers’ and vapers’ preferences and the MarkTen value equation in a disciplined way,” Barrington told investors on a conference call last week.


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Re: Altria (MO)

Berichtdoor No Refunds » 04 Feb 2014 16:09

How Will Altria Benefit From Green Smoke Purchase?

RICHMOND, Va. -- Altria Group executives are hopeful their acquisition of an electronic-vapor cigarette manufacturer will bring added insight to its own Nu Mark e-cigarette company as it prepares to roll out its MarkTen brand.

As reported in a 21st Century Smoke/CSP Daily News Flash, Altria Group Inc. announced that its subsidiary Nu Mark LLC entered into an agreement to acquire the e-vapor business of Green Smoke Inc. and its affiliates for approximately $110 million in cash, subject to closing adjustments, and up to $20 million in incentive payments.

“Nu Mark’s entry into the e-vapor category with its MarkTen product was an important development in Altria’s innovation strategy,” said Marty Barrington, Altria’s chairman and CEO. “Adding Green Smoke’s significant e-vapor expertise and experience, along with its supply chain, product lines and customer service, will complement Nu Mark’s capabilities and enhance its competitive position. Further, Green Smoke’s culture of innovation and history of producing high-quality products are consistent with Altria’s culture.”

Green Smoke was founded in 2008 and has operations in the United States and Israel. Green Smoke has sold e-vapor products since 2009 and its revenues for 2013 were approximately $40 million. Green Smoke sells premium products, with most of its sales in the United States. Its product lines, which are sold under the Green Smoke e-vapor brand, include both rechargeable and disposable versions. Green Smoke brings a team of talented employees with significant experience in developing, manufacturing and marketing high-quality e-cigarettes.

The agreement contains provisions to retain key management infrastructure and talent. Subject to closing conditions, Nu Mark anticipates that the transaction will be completed in the second quarter of 2014.

“We are very pleased to be joining the Altria family of companies,” said Robert Levitz, Green Smoke’s CEO. “We are dedicated to innovation and believe joining Nu Mark will help us deepen that expertise and create new opportunities for our customers, our employees and our products.”

Tobacco analyst Bonnie Herzog of Wells Fargo Securities, New York, said the acquisition is a positive for Altria.

“We have long believed companies would develop portfolios of e-cig brands that cater to different consumers,” she said in a research note today.

She also reported that the majority of Green Smoke's sales are online in the United States, though the company does have a small presence in convenience stores. According to Nielsen, Green Smoke's retail sales in c-stores for the past 52 weeks through the period ending Dec. 21, 2013, were $3.9MM for 0.8% share.

“Altria took a ‘deep scan’ of the entire e-vapor space and felt Green Smoke was the right fit at the right time,” Herzog said, enumerating several reasons, including:

Green Smoke presents an opportunity for Philip Morris to develop a portfolio of e-vapor brands, complementing its existing MarkTen e-vapor product, as Green Smoke can reach a different consumer since it doesn't look like a traditional cig and it is bigger than MarkTen with a stronger battery.
Altria can leverage its sales, distribution and infrastructure (Green Smoke has 140 employees, or 40 in the U.S., compared to Altria's 2,000 person sales force).
Green Smoke's proprietary technology.
Altria will likely include Green Smoke's technology in its technology and distribution sharing agreement with PMI as Green Smoke has minimal international distribution.

Altria Group directly or indirectly owns 100% of each of Philip Morris USA Inc, U.S. Smokeless Tobacco Co. LLC, John Middleton Co., Nu Mark, Ste. Michelle Wine Estates Ltd. and Philip Morris Capital Corp. Altria holds a continuing economic and voting interest in SABMiller plc. The brand portfolios of Altria’s tobacco operating companies include Marlboro, Black & Mild, Copenhagen, Skoal and MarkTen.


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Re: Altria (MO)

Berichtdoor Lukang » 22 Aug 2014 17:33

Altria announced on Thursday that its board of directors increased its dividend by 8.3% to $0.52 per share per quarter, up from the previous total of $0.48 dividend. The new annual dividend of $2.08 per share generates a yield of 4.9%, based on Altria’s most recent closing price of $42.46.
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Re: Altria (MO)

Berichtdoor NLFB » 15 Sep 2014 20:27

Mag hier zeker ook eens vermeld worden!

Molson, Altria hit records on brewer merger talk

(Reuters) - Talk about further consolidation in the brewing industry was helping lift consumer staple stocks on the S&P 500, with the largest gainers Altria (MO.N), in point terms, and Molson Coors (TAP.N), percentage-wise.

Altria rose 2.8 percent to $44.37 as the maker of Marlboro cigarettes has a near 27 percent stake in SABMiller (SAB.L), the world's second-largest brewer, which larger rival Anheuser-Busch InBev (ABI.BR)(BUD.N) would be interested in buying, according to a Wall Street Journal report on Monday.

News that AB InBev was talking to banks about financing for a deal that would be worth over $100 billion followed a confirmation from third-largest brewer Heineken (HEIN.AS) on Sunday of an approach from SAB, which the Dutch brewer rebuffed.
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