I’m not addicted to smoking, in fact my wife and I don’t use any tobacco products. But I am addicted to buying wonderful businesses.
On 08/23 I fully expect MO to declare a dividend raise, their second for the year. The one earlier this year was unexpected but I believe accounts for some of the tax savings this year. The regular raise is in August and it’s around the 23rd on a Thursday every year. Somewhere between 2:45-3:00 E is when I expect the news.
My guess is a raise to .78. MO is one of the most shareholder friendly companies I know. They have agreed to pay out 80% of their earnings as dividends. This is why I expect the raise today.
The U.S. populations of smokers continues to decline, this is no secret. Since tobacco is inelastic, Altria has more than kept up with price increases. Altria has been working with Philip Morris on getting their IQOS system approved in the U.S. I think this will be a nice catalyst for the stock if approved late this year. Let’s also not forget that MO owns about 10% of AbInbev, a cash cow and huge beer business. They own not just Marlboro in the U.S., they own Skoal and Copenhagen, leaders in smokeless tobacco. They also own Nu Mark, their e-vapor business; Nat Sherman, a premium cigar company; Ste Michelle Wine , a popular and well known winery.
After Thursday’s raise, MO will yield over 5%. Show me another Blue Chip yielding 5% with an A or better credit rating. That’s why I can’t stop buying this great company.
MO has become about 15% of my portfolio. I am slowing purchasing but I’m looking forward to years of dividends increases to come.
If MO raises by .08 that will be an income boost of $403 yearly since I own 1260 shares. That will be by far my largest income increase from just a dividend raise.
What are you buying?
UPDATE from 3:30 E 08/23 (even better than expected, .10 raise, over 20% increase yoy):
|Altria Increases Quarterly Dividend by 14.3% to $0.80 per Common Share|
|RICHMOND, Va.–(BUSINESS WIRE)–Aug. 23, 2018– Altria Group, Inc. (Altria) (NYSE:MO) today announced that its Board of Directors voted to increase Altria’s regular quarterly dividend by 14.3% to $0.80 per common share versus the previous rate of $0.70 per common share. The quarterly dividend is payable on October 10, 2018, to shareholders of record as of September 14, 2018. The ex-dividend date is September 13, 2018.
The new annualized dividend rate is $3.20 per common share, representing a yield of 5.2% based on Altria’s closing stock price of $61.00 on August 17, 2018.
Today’s dividend increase reflects Altria’s intention to return a large amount of cash to shareholders in the form of dividends and is consistent with Altria’s dividend payout ratio target of approximately 80% of its adjusted diluted earnings per share. Altria has increased its dividend 53 times in the past 49 years.