While many people vow to quit smoking as their new year’s resolution, Altria Group (MO) is betting that most won’t be able to stick with these promises. The Altria Group, a top U.S. tobacco maker, has begun to enjoy a gain in market share with stocks that are staying cheap and a dividend that is proving generous.
More than 50% of the U.S. tobacco market is dominated by Altria, likely due to Marlboro remaining one of the most popular brands of cigarettes in America. Trailing behind is Reynolds American (RAI), which only has a hold on 30% of the tobacco market.
Altria is looking like a cheaper and higher quality stock because of an 11 times forward earnings. Along with that, the price-earnings-to-growth ratio shows that Altria’s stock is offering discounts of 30% to a broader market and 15% to its own 5 year average.
The tobacco company is also known to payout steady cash dividends every year since 1970. Currently, the yield comes to 6.9% with a 5 year average of 15.6%.
Stock expert are expecting the average target price to stand at $22.05. This could lead to an expected return of upwards to 17% in the next year.
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