Altria (MO) is currently one of the best investments in the tobacco industry. This Tobacco Company has a strong balance sheet and an aggressive plan for growth and diversification in the industry.
Altria is also devoted to the return of income dividends to shareholders and secure the ransom. Of all large organizations, tobacco, Altria is the path of least resistance to maintain the leading position throughout the industry. In this article I will explain why shareholders should buy and hold these stocks for a long period of time, while new investors should consider these stocks as defensive long-term assets to add to your portfolio.
Beta Altria is about 0.5, and PEG ratio above two. These figures underscore the reliability and stability of the stock to look ahead. Enterprise value of nearly $ 10 billion more than the market capitalization, which means that Altria is currently undervalued in the market, investors. Sales growth in the relatively flat compared with 2011, while sales fell by nearly eight percent over the previous quarter. Return on equity is more than 100 percent, and increased significantly during the last three quarters. Operating margin is greater than 18 percent, and increase the expense of the last three quarters, but not more than one percent. Net interest margin is also relatively flat, reduced by less than one percent from the end of 2011.
Debt to equity ratio increased from 2011, but moved about 3.5 in the last two quarters.
Altria Split output exceeds the industry average is about 4.8 per cent, equivalent to more than $ 1.60 per year. The price is about 16 times, as well as income exceeds the industry average. Altria is currently undergoing some restructuring, as he pays the IRS and adapts to changing demand in the tobacco industry. In spite of this phase transition, Altria continues to expand its brands, returning profits to shareholders.
Reynolds American (RAI) has announced it will cut its staff by 10 percent by the end of 2014 due to lack of demand for cigarettes. Higher taxes and low salaries deter many people from smoking cigarettes, as it was before. California has recently tried to pass legislation to raise taxes on cigarettes on the dollar in order to avoid smoking while funding for further studies of cancer. Altria contributed nearly $ 35 million to $ 46.8 million advertising campaign to win this election. Fortunately for Altria and Reynolds, the proposal failed to pass 29 with 50.3 percent of voters rejected the bill. In addition to countless 110,000 votes, 28,000 patients not receiving bills than supported it. Altria has taken several measures to adapt business models to address current and future obstacles to its current revenue stream.
Restructuring of its activities is the main goal. Altria pays more attention to smokeless products, and diversify its product portfolio. Altria is also a moderate increase in the price where it can add a promotional line with its already popular brands. Along with the obstacles in the market, Altria earnings were hampered by the recent problems with its IRS. Altria about this scenario and will pay $ 450 million in outstanding $ 500 million due in the second quarter of 2012. By the end of 2011, Altria paid $ 1.1 billion for the missed tax payments from 1996 to 2003. In addition to updating restrictions on smoking in the past few years, another problem that lies ahead of Altria is the ability to ban menthol to the FDA In 2011, Altria developed in conjunction with windows A / S for the development of non-combustible products with less nicotine and tobacco.
Altria recently launched a new product for one of its subsidiaries, Numark, in May 2012. This product is called Verve and it was released in retail outlets in Virginia prior to launch. The product behind the counter and is designed for consumers looking for alternative tobacco. Altria research shows that about 30 percent of adult smokers are now looking for an alternative to traditional tobacco products. The Verve product discs that contain nicotine and flavors, but not tobacco, consumers can chew and discard the product as soon as they finished. There are 16 disks of blue mint n for each package. Altria is also increasing its Skoal and Snus products in the market. Altria expects to increase the amount of smokeless four percent a year over the next few years.
Altria is one of the most attractive investments because of its good will and focus on the domestic market. Phillip Morris International (PM) suffered in recent years due to its influence in Europe. Phillip Morris has received almost 40 percent of its revenues in 2011 from Europe. The recent decline in economic conditions abroad, prevents revenue Phillip Morris International, significantly. PM is going through the wind is about 25 cents per share in 2012, while she experienced the benefits of 19 cents per share in 2011. PM suffers especially in Spain and Italy. The crisis in Europe will have the effect of obstacles on the income of the Prime Minister for many years. More than 20 percent of the prime minister was in Europe in 2011.
Negatively, Altria managed to release a new version of the Marlboro brand of cigarettes, while higher prices for packaging as well. This is done as it pays the IRS and continues to raise the dividend and redemption schedule for the remainder of 2012. Altria has confidence in their ability to improve its wines, along with a subsidiary of promising new Marlboro Black and releases a special Blend. The adoption of the new operating architecture allows Altria to focus more on the meeting and the capitalization of the divergent interests of consumers across the country. Markets remain competitive, but also among the world’s tobacco distributors, such as British American Tobacco (BTI) and Japan Tobacco, Altria, obviously, has the best game plan to effectively adapt to changing demand by consumers.
Disclosure: I have no positions in any stocks mentioned, and does not intend to initiate any positions within the next 72 hours.