Big Tobacco Leader Altria Holding Steady Despite Worries
About Altria Group Inc.
What does the company do? Cigarette manufacturer
2009 Financial report:
Q. The outlook for my shares of Altria Group Inc. always concerns me. What is the latest outlook? -- B.P., via the Internet
A. Much depends on the continued popularity of its famous Marlboro cigarette brand, which accounts for more than two-thirds of the company's operating income. Younger smokers in recent years have been attracted by some of the brands offered by competitors.
It is no secret that the U.S. cigarette industry, on which the firm is dependent, is in a long-term decline due to health-risk issues. More graphic health warnings on cigarette packs mandated by the U.S. Food and Drug Administration will take effect in
Potential litigation and increased taxation are other concerns that could cut into profits.
Despite these ongoing worries, however, this remains a powerful company that retains its investment appeal based on its commanding industry position, cash flow, dividends and the unlikelihood that any new tobacco companies will emerge.
Altria (MO) shares are up 27 percent this year following last year's 30 percent increase. Third-quarter earnings were up 28 percent due to higher cigarette prices and increased smokeless tobacco sales.
Altria is comprised of Philip Morris USA, U.S. Smokeless Tobacco Co. that makes Skoal and Copenhagen brands, and John Middleton Co. in cigars and pipe tobacco. It also owns Ste. Michelle Wine Estates and 27 percent of SAB Miller, the world's second-largest brewer.
It holds the leading U.S. position in cigarettes and smokeless tobacco and is No. 2 in cigars. It holds more than 50 percent of the overall U.S. tobacco market, well ahead of No. 2 Reynolds American and No. 3 Lorillard.
The consensus analyst rating of Altria shares is a strong "hold," according to Thomson Reuters. That consists of two "strong buys," two "buys" and eight "holds."
The leader of the overall company since 2008 has been chairman and chief executive
Earnings are expected to be up 9 percent this year compared to the 14 percent increase expected for the tobacco industry, according to Thomson Reuters. Next year's forecast is for 6 percent growth versus 18 percent for its peers. The five-year annualized return is projected as 6 percent compared to 11 percent expected industrywide.
The company's finance leasing unit, Philip Morris Capital Corp., no longer accepts new investments.
Available at Amazon.com:
- 8 Investing Resolutions for 2011
- Growth Versus Value Investing in 2011
- Big Tobacco Leader Altria Holding Steady Despite Worries
- ETFs Capture Market Attention & Investment
- 5 Investment Themes for 2011
- How to Take Advantage of a Weak Dollar
- Best Foreign Large-Cap Blend Funds for the Long Term
- Fed Moves Boost Stock Returns
- Bond Funds Really Can Lose Money
- Teach Your Kid a Lesson in Investing
- Experts Offer Advice on Investing in 2011
- Active Fed and Conservative Congress to Pave Uncertain Way
- Best Intermediate Municipal Bond Funds for the Long Term
- Fundamental ETFs Go Beyond Index Investing
- Investors Ease Back Into Stocks
- Why You Should Buy Stocks That Pay Dividends
- What Investors Can Learn from the Insider-Trading Scandal
- How Emotional Investing Affects Your Bottom Line
- How Quantative Easing 2 Could Affect Your Money
- Ways to Invest in the Dollar's Decline
- Legendary Fund Manager Bill Miller Sees Good Times Ahead
- Best Large-Cap Growth Mutual Funds for the Long Term
- Best Large-Cap Value Funds for the Long Term
- Foreign Bond Funds for Yield-Hungry Investors
- Funds for Easing Back into Stocks
- Why Low Expense Ratios Aren't Only Difference Between Index Funds
- Mutual Fund Performance Numbers Can Be Misleading
- Computer Giant HP Weathering the Drama
- Airline Stocks Take Off in 2010
- Retailer Stock Prospects Look Rosier This Year
- 6 Investing Mistakes Young People Make
- Inflation or Deflation: What's It Going to Be?
- How to Inflation-Proof Your Portfolio
- Easy ETF Portfolios for Any Age
- Gold's Hype May Blind Average Investors To Its Inherent Risk
- New ETF Holds Gold As Well As Silver, Platinum and Palladium
- To Be Truly Diversified, Do Investors Need Alternative Funds?
- The Best Short-Term Bond Funds for the Long Term
- How to Pick the Best Mutual Fund
- Why the Dow Usually Rallies After Midterm Elections
- Is a Retirement Income Fund Right for You?
- Index Annuities: Trick or Treat?
- Volatile Markets Beckon Beginning Investors
- Coca-Cola's Prospects Bubbling
- Balanced Mutual Funds Provide Defense
- International Growth Critical for Wal-Mart
- Global Financial Services Stocks Revive
- Cisco Systems Charging Hard Against Competitors
- Large Cap Stocks Move Up in 2010
- Betterment.com Brings Index Funds to the Masses
- Best Emerging Markets Funds for the Long Term
- 6 Reasons to Buy Dividend-Paying Stocks
- Why You Should Invest in Corporate Debt
- Risk Aversion Is Here to Stay
- Investors Lost Big Last Decade
- 3 Ways to Invest in the Financial Sector
- The Case for Investing in Commodities
- European Stocks as Contrarian Investment
- SIPC Considers Revamping Rules
- Will the Dramatic Run-Up in Real Estate Funds Last?
- 3 Ways to Use Index Funds
- How to Play It Safe With Muni Bonds
- Investing Strategies for This (Or Any) Market
- Mutual Funds for Dividend Junkies
- How to Navigate a Low-Rate Environment
- 5 Slow and Steady Funds for Skittish Investors
- Will the REITs Rally Continue?
- 3 Ways to Invest in the Real Estate Rally
- More You Know About Stocks & Industries; Less Volatility Will Rock Your World
- Investors Still Favor Bond Funds
- Valley Forge Fund: How a One-Man Mutual Fund Beats the Rest
- Mutual Fund Fee Reform: Multibillion-Dollar Sleight of Hand
- Avoiding a Bond Market Bubble
- Essential Sites For the ETF Novice
- When Choosing a Bond Fund Keep These Factors in Mind
- 3 Ways to Invest in the Small-Cap Rally
- Catastrophes and Your Investment Risk
- Mutual Fund Buzz: America the Beautiful
- Mutual Fund Buzz: Emerging Markets Get a Boost
- Is Your Portfolio Ready for A Double-Dip Recession?
- Anatomy of a Risky Target-Date Fund
- When is the Best Time to Buy An Immediate Annuity
- 5 Tips For the Average Investor
- Why Emerging Markets Belong in Your Portfolio
- What China's Currency Reform Means For Investors
- Financial Reform For the Retail Investor
- Target-Date Funds Are Not A 'Sure Bet'
- ETFs Can Be Volatile Too
- Chinese Growth Expected to Boost Asian Markets Long-Term
- 3 Mutual Funds to Steer Clear Of
- Mutual Fund Buzz: Alternatives On The Rise?
- Mutual Fund Buzz: The Tax Man Eyes The Fund Manager
- Mutual Fund Buzz: Bond Bubble?
- Ease Back Into Stocks With These Mutual Funds
- Value and Growth: Why Investors Need Both
- Investing Your Social Security Check? Consider These Factors
- New Efficiencies Should Help Alcoa as Recession Lifts
- Mutual Fund Fees: How Much is Too Much to Pay
- In Gold's Shadow: How Other Metals Fit Into Portfolios
- Should Investors Sit This One Out?
- There's No 'Perfect Time' to Dive Into Investing
- How to Keep Your Cool in a Turbulent Market
- How to Repair Your Damaged Portfolio
- Keep Bond Portfolio Broadly Diversified
- Why Not All Target-Date Funds Are Created Equal
- Five Tips to Avoid Confirmation Bias
- Financial Reform Legislation Gives Shareholders More Say
- Fiduciary Provision May Be Most Important Part of Financial Reform Bill
- What Gold Can and Cannot Do For You
- Why Your Portfolio Needs More Risk
- Read Mutual Fund Ads Critically
- Keep the Right Bonds in Your Portfolio
- European Debt Crisis Affects Investments
- 7 Valuable Lessons For Investors
- The Reality of Mutual Fund Returns
- Mutual Funds and a Changing Landscape
- Assembling a Sturdy Retirement Portfolio
- Funds for Recent College Grads
- Many 'Wide Moat' Companies Losing Competitive Advantage
- Who Got Hit Worst in the Market Crash
- Utility Stocks: Trade Flash for Dependable Payouts
- Formulate Strategy Before Diving Into Higher Risk Mutual Funds
- Contrarian Investors Target Promising Out-of-Favor Stocks
- Income Investors Face Challenges as Economy Shifts
- Can SEC Beat Goldman Sachs?
- Business Schools' Great Ethics Debate
- Investing for Retirement A Balancing Act
- Fees Can Take Big Bite Out of Retirement Fund Contributions
- Small-Cap Stocks Poised For Big Comeback
- John C. Bogle's Old-fashioned Investing Advice Still Applies
- 10 Great Mutual Funds You've Never Heard of
- Mutual Funds Fees & Expenses Only One Factor
- Why Investors Are Flocking to Index Funds
- Trend Setting Companies Target Hip Young Consumers
- Weakening European Stocks Offer Some Bargains for U.S. Investors
- Investing: What to Do About Inflation and What Not to Do
- Kick-Start a Portfolio With Just a Little Cash
- Exchange Traded Funds Offer Low-Cost Diversification
- Fresh Look at Socially Responsible Mutual Funds
- Technology Opens Doors for Investors
- Make the Most of Your Mutual Fund Money
- Fiduciary Standard for Giving Investment Advice
- 'Investment Rewards' Credit Cards Well Worth A Look
Investing - Big Tobacco Leader Altria Holding Steady Despite Worries | Successful Investing
(c) 2010 TRIBUNE MEDIA SERVICES, INC.