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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Altria Group, Inc. (XNYS:MO) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MO
Name:
Altria Group, Inc. (XNYS:MO)
Sector:
3.03B
Industry:
Tobacco
CEO:
Mr. Howard Willard
Total Employees:
6,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 0.00% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ALTRIA GROUP, INC.(MO) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND TOBACCO INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
45
One Month Price Target:
$45.16
Six Month Price Target :
$45.94
Likely Price in One Year's Time:
Ticker:
$46.88
Likely Trading Range Today Under (Normal Volatility)
$44.86
Price Upper limit ($) :
$45.14
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$43.33
This week:
$41.26
This month :
$37.52
Other Primary facts
Market Cap:
80.26B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.80B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.02%
-10.03%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$52.77
$49.24
$37.23
$40.76
Medium risk (<10%) entry points
Buy Call
Sell Call
$48.09
Buy Put:
Sell Put:
$47.33
$41.90
$42.67
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MO
Sharpe Ratio:
-0.47%
Comparison:
MO, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -212.17% lower than the industry
& is -120.62% lower than the market/S&P 500 average
Average Returns/Yield of
MO
Daily returns:
0.00%
Weekly returns:
0.00%
Monthly returns:
0.01%
Yearly returns:
4.01%
Comparison of returns:
Average annual returns/yield (last 3 years) is -97.98% below industry average
Classification:
MO, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.61
Statistical test of Returns:
MO has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.81%
Weekly Volatility:
4.05%
Monthly Volatility:
8.10%
Yearly Volatility:
28.04%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.82%
Volatility in last five trading days has been -54.50% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.72%
Weekly VaR:
-8.31%
Monthly VaR:
-16.63%
How Much Can the price of
MO
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-57.59%
This translates to price declining to:
$38.38
This translates to price declining to:
$19.08
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
MO is a 17.34% riskier investment compared to the market/S&P 500 & is 0.53% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -1.06% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MO
Beta in relation to market/S&P 500--0.62
Expected beta in 1 year's time:
0.684
Expected beta in 3 year's time:
0.967
Unlevered (debt free) Beta:
-0.073
Beta in relation to Nasdaq (XNAS):
0.371
Beta in relation to all global stocks::
0.468
Beta Comparison & Analysis
Beta of competitors/peers::
0.811
Beta is -23.49% lower than peers
Average Industry Beta:
0.631
Beta is -1.66% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.073
Alpha is 111.22% above industry average alpha yield
Alpha is -466% below the market average
Analysis of Cost of Capital of
MO
Equity cost of capital:
0.074
Equity cost of capital is -0.96% below industry mean WACC
Unlevered (without debt) cost of capital:
-0.87%
Before-tax cost of debt:
3.02%
After-tax cost of debt:
2.38%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.38%
WACC is 11.26% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$11.69
Revenue growth rate per share of (3Y):
-46.04
Annual revenue growth rate is 31.71% above the industry average
EPS:
$1.64
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$4.47
Balance sheet equity growth per share: 23.21%
Equity growth rate per share is 39.97% higher than the industry
Debt per share
$14.11
EBITDA per share
$3.13
Valuation Analysis Today of
MO
P/E Ratio:
46.28
P/E Ratio of Competitors/Peers:
25.77
P/E ratio is 79.57% higher than main peers & is 73.79% higher than the industry
Stock price/value with industry average P/E ratio: $43.67
MO is 3.03% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $73.27
Present value of the expected future dividends only: $54.12
P/S (Price to Sales ratio):
3.85
Price to sales ratio is -17.91% below the industry mean
P/B (Price to book value ratio):
-46.04
Price to free cash flow: 10.06
-
Net income growth rate (3Y):
-63.21%
Net income growth rate is 162.20% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 54.65%
Dividend yeild: 8.00%
Previous Dividend: $0.90
Previous adjusted dividend: $0.90
Previous Dividend: $3.60
Expected next dividend best case: $0.92
Expected next dividend worst case: $0.88
Average dividend payment (long-term): $0.87
Average dividend increase/decrease (growth rate) % per period: 0.70%
Expected next dividend payment date: 10/10/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 07/11/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$0.90
2021-12-22--$0.90
2021-06-14--$0.86
2022-03-24--$0.90
2021-09-14--$0.90
2021-03-24--$0.86
Dividend growth rate is -81.01% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-1443.47%
Net debt to equity ratio:
-1282.33%
Debt to assets ratio:
63.14%
Net debt to assets ratio:
56.09%
Debt-to-asset ratio is -43.61% below industry average
Ability to repay debt:
Interest coverage ratio:
6.69
Interest coverage ratio is -66.60% less than industry average
Looking forward:
Debt growth rate:
-4.84%
Annual debt growth is -42% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.528
Statistical significance of correlation:
MO has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.577
Stock price is -8.53% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.577
Correlation of price movement with Nasdaq (^IXIC):
0.059
Covariance of price movement with the market:
0.062
Kurtosis
5.988
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.806
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
MO
Gross Profit Margin Ratio:
268%
Operating Profit Margin Ratio:
55.84%
Operating profit margin is 164.84% higher than the industry
Net Profit Margin Ratio:
268%
Effective Tax Rate:
33.93%
Effective tax rate is 18.80% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-171.02%
Return on equity (ROE) is -264.49% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.48%
Return on assets (ROA) is -49.14% lower than the industry
Financial Leverage:
2.7x
Current Ratio:
0.62
Current ratio is -98.65% below industry average
Cash Conversion Cycle (days):
-7.1
Cash conversion cycle is -109.86% below industry average
The remaining useful life of property plant & equipment is: 0.9 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
3.5M
Each employee generates 77% more revenue than industry average revenue per employee
EBITDA generated per employee:
938.7K
Each employee generates 66% more EBITDA than industry average revenue per employee
Profit generated per employee:
501.7K
Each employee generates 57% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
505.0K
Each employee generates 95% more free cash flow than industry average revenue per employee
Assets/Capital per employee
5.6M
Each employee generates 95% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MO
BRITISH AMERICAN TOBACCO P.L.C. (XNYS:BTI)
Anheuser-Busch Inbev SA (XNYS:BUD)
TARGET CORPORATION (XNYS:TGT)
DIAGEO PLC (XNYS:DEO)
DOLLAR GENERAL CORPORATION (XNYS:DG)
THE ESTEE LAUDER COMPANIES INC. (XNYS:EL)
KEURIG DR PEPPER INC. (XNAS:KDP)
KIMBERLY-CLARK CORPORATION (XNYS:KMB)
CONSTELLATION BRANDS, INC. (XNYS:STZ)
Current Analyst Ratings
Strong buy�21%
Buy�13%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
21.05B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
6.96B
14.09B
-
533.00M
2.27B
1.20B
19.00M
2.29B
-
842.00M
233.00M
5.63B
11.75B
3.01B
4.56B
1.55B
3.01B
Statement of Cash Flow
Date:
Period:
52.00M
Differed Income Tax :
43.00M
Stock Based Compensation :
-
Change in Working Capital :
1.07B
Accounts Receivables:
-
Other Working Capital:
265.00M
Other Non-Cash Items:
- 46000.00K
Net Cash Provided by Operating Activities:
3.08B
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
5.35B
-
5.35B
46.00M
1.21B
149.00M
6.76B
1.55B
5.18B
12.29B
13.48B
-
981.00M
33.47B
-
40.24B
379.00M
2.52B
-
-
8.03B
10.93B
25.41B
1.90B
31.07B
-
42.00B
935.00M
30.99B
- 2962000.0K
-
March 31, 2022 at 6:00:00 AM
9.25B
- 1760000.00K
40.24B
-
27.92B
22.6B
-
- 34000.00K
- 34000.00K
-
-
- 576000.00K
- 1645000.00K
- 11000.00K
- 2232000.00K
-
809.00M
5.40B
4.59B
3.08B
- 45000.00K
3.03B
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
MO
2023
2024
2025
2026
2027
$58.84
$61.29
$63.85
$66.51
$69.28