MO remains up over 20% off its 52-week high
Altria Group, Inc. (NYSE:MO) is an American corporation and one of the world's largest producers and marketers of tobacco, cigarettes, and related products. MO operates worldwide and is the parent company of Philip Morris USA, John Middleton, Inc., U.S. Smokeless Tobacco Company, Inc., and Philip Morris Capital Corporation. Altria also maintains large minority stakes in Anheuser-Busch Inbev SA (NYSE:BUD), the Canadian cannabis company Cronos Group Inc (NASDAQ:CRON), and the e-cigarette maker Juul. At last glance, MO is trading up 0.2% at $45.35.
Altria stock has fallen 7% over the past 12 months and is currently trading down 21% since peaking at a three-year high of $57.05 in early May. Additionally, shares of MO have dropped 6% year-to-date. However, Altria stock has increased 8% over the past month and is up 10% since hitting a more than 52-week low of $41.00 in early July, following news that the U.S. Food and Drug Administration (FDA) was preparing to order Altria's Juul Labs Inc. to remove its e-cigarettes from the U.S. market. MO plummeted on this news until, on July 6, the U.S. Food and Drug Administration (FDA) said it was temporarily lifting its ban on Juul products.
The tobacco company’s valuation metrics remain mixed, with Altria stock trading at an intriguing forward price-earnings ratio of 9.29 but also at a high price-sales ratio of 3.92. Nonetheless, MO offers an incredible dividend yield of 7.97% with a forward dividend of $3.60, making it one of the highest dividend yields available on the stock market today.
MO has struggled to maintain consistent growth on the bottom line over multiple years as well, reporting an $8.3 billion decrease in net income for fiscal 2019 and a $2 billion decrease for fiscal 2021. Still, the tobacco name is expected to end fiscal 2022 with 5% revenue growth. Estimates also have MO increasing revenues another 5% for fiscal 2023, making Altria stock a decent option from both a value and dividend perspective.
Altria stock premium is affordably priced at the moment. This is per the equity's Schaeffer's Volatility Index (SVI) of 19%, which stands in the relatively low 20th percentile of readings from the past year. What's more, the security's Schaeffer's Volatility Scorecard (SVS) sits at a slightly elevated 77 out of 100, meaning the shares have exceeded option traders' volatility expectations during the past year.