Historical Dividends for Altria (1979-2022)

Altria (ticker symbol: MO) is one of the most popular dividend stocks among dividend growth investors. Altria owns Phillip Morris USA, which sells Marlboro, the most popular cigarette brand in the world in terms of sales.  Altria controls about 48.8% of the cigarette market in the United States and sells various cigarette brands such as Parliament, Virginia Slims, and Basic brands in addition to the Marlboro brand.

Altria was formerly known as Phillip Morris Companies, Inc. prior to a re-branding that occurred in 2003.  Altria has engaged in two corporate spin-offs in recent years.  In 2007 Kraft Foods was spun off from Altria (now know as Kraft Heinz with ticker symbol KHC), and in 2008 Phillip Morris International (ticker symbol: PM) was spun off. 

I last wrote about Altria back in 2012 and am providing my first follow-up on the popular dividend stock since then.  Altria's stock price has struggled since July 2017 when it topped out at about $74/share.  At the time, Altria had a trailing price/earnings (PE) ratio of around 22 or 23 and an annual dividend payout of $2.44/share.  At that price and that dividend payout, Altria's dividend yield was approximately 3.30%.

According to Value Line, Altria is projected to earn approximately $4.85/share for the 2022 calendar year.  Altria closed at $46.71 on December 9, 2022.  Assuming that Altria really does earn $4.85/share, then its current trailing PE is about 9.63, about 56% lower than it was at the stock's peak in July 2017.  Altria currently pays an annual dividend of $3.76/share.  At the most recent closing price for Altria, its dividend yield is about 8.04%, about 143% higher than the dividend yield was in July 2017.

The crazy thing is that even though Altria's earnings per share increased 43% from about $3.39/share in 2017 to a projected $4.85/share in 2022 and the dividend per share increased 54% from $2.44/share to $3.76/share, the share price has decreased about 37% from $74 in July 2017 to $46.71 today.

There are several reasons for Altria's share price decline in the past several years.  One reason was the investment of $13 billion in JUUL in 2018, an investment which may end up being a total loss for Altria.  Altira also invested $1.8 billion in Canadian cannabis company, Cronos, in 2019, an investment which is also almost certainly underwater at the present time.  There has also been a decline in smoking rates among adults in the U.S. from about 20.9% in 2005 to about 12.5% as of 2020. 

Nevertheless, despite a somewhat cloudy and unpredictable future, Altria is still very profitable and is at one of its lowest valuations since the late 1990s.  I personally believe that a decade from now, Altria share price will be significantly higher than it is today and ordinary investors will wonder how this stock ever traded at such a low valuation relative to earnings per share and annual dividend payouts.

The charts shown below (click on each chart for a larger view) show annual dividend payments for Altria between 1979 and 2022.  These charts also show increases in the annual dividend payments over various 5- and 10-year periods of time.  As shown, the 5-year annualized dividend increase has ranged between a low of about 7.70% (for the period ending in 2022) and a high of about 25.36% (for the period ending in 1990).   The 10-year annualized dividend increase has ranged between a low of about 8.03% (for the period ending in 2022) and a high of about 23.12% (for the period ending in 1989). 

 

* Without Kraft Foods included in its results, Altria would have paid a dividend of  $2.88 in 2007.
** Without Phillip Morris International included in its results, Altria would have paid a dividend of $1.22 in 2008., 
*** These charts start with data from the calendar year 1979 because I was unable to locate reliable annual dividend payouts for the years prior to 1979.

Historical Total Returns of Altria (MO) from March 1970 - February 2016

Altria Group, Inc. (symbol: MO) is well-known among stock market investors for being one of the greatest long-term wealth-creation vehicles available.  It has provided annualized returns in excess of 20% per year since at least the 1960s.  Historical closing prices and dividend payments for Altria dating back to the early 1970s are available for inspection from Yahoo Finance.

Altria is one of the world's largest tobacco and cigarette corporations and is the parent company of Philip Morris USA, John Middleton, Inc., U.S. Smokeless Tobacco Company, Inc., Philip Morris Capital Corporation, and Chateau Ste. Michelle Wine Estates. Kraft Foods Inc. was spun off to shareholders in 2007 and Philip Morris International was spun off to shareholders in 2008. 

Altria was known as "Philip Morris Companies Inc." prior to 2003.  The company name was changed in an apparent effort to distance the company from the negative perception of tobacco companies at the time. 

Altria is a popular holding among dividend growth investors and, accounting for spin-offs, has raised dividend payments for an impressive 46 consecutive years.  I have previously discussed Altria's historical dividends in a prior post.

The total returns for calendar years 1971-2015 and for partial years (3/31/1970 - 12/31/1970) and for 2016 up through market close on 2/26/2016 are shown in the charts below (click on an image for an enlarged view).  The total returns shown below have been calculated based on an assumption that all dividend payments are automatically reinvested back into additional shares on the date on which each dividend was effectively removed from the stock price (e.g., on the ex-dividend date).

As shown below, the total returns for Altria have been absolutely phenomenal.  The total return between market closes on March 31, 1970 and on February 26, 2016 was about 505,704%!  Assuming no transaction costs, a $1000 investment into MO at the market closing price on March 31, 1970 would now be worth about $5,075,045.  That is an annualized return of approximately 20.4% over a nearly 46-year period of time. 

As shown in the charts above, Altria has increased in value for almost every year tracked.  Notable down years included those during the steep 1973-74 bear market, the 2008 financial crisis, as well as several years during the 1990s when there were fears that the U.S. government would completely ban the sale of tobacco products. 1999 was a particularly bad year as investor sentiment sourced in the wake of the Tobacco Master Settlement Agreement, pursuant to which Altria and other major tobacco companies agreed to pay $206 billion to 46 U.S. states to settle Medicaid lawsuits.  The Agreement also required the tobacco companies to end certain marketing practices.

The Tobacco Master Settlement Agreement did not put Altria out of business.  Instead, Altria emerged even stronger than ever and now controls over 50% of the U.S. market for cigarettes and smokeless tobacco.   Altria's total return between the market closes on December 31, 1999 and on February 26, 2016 has been approximately 2,668%, or an annualized return of about 22.8%.

Altria has been a fantastic performer in the stock market since at least the early 1970s and should continue to be so well into the future.  There have been government bans on tobacco television and radio advertising since 1971 and on billboard and via certain other marketing practices since the Tobacco Master Settlement Agreement.  The advertising bans have results in decreased public consumption of tobacco products.  However, the bans have also effectively created enormous barriers to entry in the U.S. tobacco market, giving Altria huge pricing power which should help the company continue to record consistent earnings growth long into the foreseeable future. 

Historical Dividends for Altria (1979-2012)

Altria (ticker symbol: MO) is one of the most well-known corporations in the world.  Altria owns Phillip Morris USA, which sells Marlboro, the most popular cigarette brand in the world in terms of sales.  Altria controls about 50% of the cigarette market in the United States and sells various cigarette brands such as Parliament, Virginia Slims, and Basic brands in addition to the Marlboro brand.

Altria was formerly known as Phillip Morris Companies, Inc. prior to a re-branding that occurred in 2003.  Altria has engaged in two corporate spin-offs in recent years.  In 2007 Kraft Foods (ticker symbol: KRFT) was spun off from Altria and in 2008 Phillip Morris International (ticker symbol: PM)was spun off. 

Altria is a favorite equity holding among investors seeking dividend income.  As of the market close on November 23, 2012, Altria's dividend yield was about 5.26% and the company has historically maintained one of the largest dividend yields among equities in the Standard & Poor's 500 Index.  According to Altria's website, the company's target dividend payout ratio is approximately 80 percent of adjusted earnings per share.  After accounting for stock splits and the spin-offs of Kraft Foods and Phillip Morris International, Altria has increased its dividend payout per share every year since at least 1970.

The cigarette industry is a mature one that has loyal (or addicted) costumers.  State and local governments have raised taxes on cigarettes on a seemingly annual basis, yet the sales of cigarettes and other tobacco products continue to increase annual given the relatively inelastic demand for such tobacco products.

As a result of the maturity of the market, the relatively inelastic demand, and the large target dividend payout ratio of 80% of adjusted earnings per share, Altria has provided an unbelievable total return to stock holders over the years, making many long-term holders multimillionaires.  Between January 1970 and November 2012, Altria's total return (accounting for reinvestment of dividends and the spin-offs of Kraft Foods and Phillip Morris International) was approximately 216,200%, and annualized gain of about 20% per year!  A $10,000 investment in 1970 in Altria would have grown to approximately $21,620,000 by November 2012, an astonishing return over that time period.

Not surprisingly, the growth in Altria's annual dividend payouts has also been incredibly impressive.  The chart below shows the annual dividends for Altria paid between 1979 and the estimate 2012 full year distribution.*  As shown, after accounting for share splits and the spin offs of Kraft Foods and Phillip Morris International, Altria paid a dividend of approximately $0.0521/share in 1979 and the dividend has increased to an estimate $1.70 in 2012.  The annual dividend has therefore increased 10,421% during this time period.  The annual dividend dividend has increased at an annualized rate of over 15% per year since 1979.

The chart shown below (click on the chart for a larger view) also lists increases in the dividend payout over various 5- and 10-year periods of time.  As shown, the 5-year annualized dividend increase has ranged between a low of about 8.03% (for the period ending in 2007) and a high of about 25.36% (for the period ending in 1990).   The 10-year annualized dividend increase has ranged between a low of about 8.42% (for the period ending in 2007) and a high of about 23.12% (for the period ending in 1989).

Altria has been a staple of investors hungry for large and reliable ever-increasing dividend payouts and should continue to be so for years to come.  There have been fears that fewer people would taking up smoking given the effort to educate young people about the dangers of tobacco use and the always-looming treat of lawsuits.  However, Altria has nevertheless continued to provide strong returns in recent years.  Anyone looking for dividend income should consider Altria as well as Phillip Morris International, which may have a brighter future given the projected steady increase in the number of smokers overseas.

* Without Kraft Foods included in its results, Altria would have paid a dividend of  $2.88 in 2007.
** Without Phillip Morris International included in its results, Altria would have paid a dividend of $1.22 in 2008., 
*** This chart starts with data from the calendar year 1979 because I was unable to locate reliable annual dividend payouts for the years prior to 1979.