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華爾街日報If You Had Invested $1,000 in Altria Group Stock 1 Year Ago, Here's How Much You Would Have Today
Key Points
Altria Group's dividend comprised a major portion of the stock's total return.
The shares have a high dividend yield.
It's instructive to look back to see how a stock has performed. You can use that information to look ahead and think about the future return.
Altria Group (NYSE: MO) produces and sells tobacco products in the United States. It's a controversial business, but how have its shareholders fared over the last year if they invested $1,000?
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The calculation
Altria's stock price gained 6.9% over the past year through Dec. 10. That's half the S&P 500 index's 13.8%.
But that doesn't tell the whole story. You would have received dividends if you'd bought Altria's stock and if you'd invested passively in the S&P 500. You need to factor those in when calculating the total return.
Thanks to Altria's high dividend payments, the shares produced a total return of 13.5%. However, that still lagged the S&P 500's 15.6%.
Your $1,000 investment in Altria's stock would've been worth $1,135 when including the price gain and dividend payments. That same amount invested in the S&P 500 index would've been worth $1,156, however.
Looking ahead
Altria Group may tempt investors who place a high importance on dividends. The board of directors has increased payouts annually for a number of years. Most recently, the company raised October's payout by 3.9% to $1.06 a share.
At the new rate, Altria's stock has a 7.2% dividend yield. That dwarfs the S&P 500's 1.1% yield.
However, the business has been weakening. Most of Altria's revenue comes from smokeable products, particularly cigarettes. The segment's top line fell 1.3% in the third quarter to $4.6 billion. Its cigarette volume continued falling, and its market share, particularly its core Marlboro brand, has been dropping.
With lower volume and lost market share, Altria's long-term business prospects don't look bright. Hence, I'd pass on the shares despite the dividend yield.
Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.