Altria Group Inc. Stock Buy Recommendation Reiterated (MO)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Altria Group (NYSE:MO) has been reiterated by TheStreet Ratings as a buy with a ratings score of B+ . The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

• EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:

• MO's revenue growth has slightly outpaced the industry average of 3.7%. Since the same quarter one year prior, revenues slightly increased by 3.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
• The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Tobacco industry and the overall market, ALTRIA GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
• Net operating cash flow has slightly increased to $2,205.00 million or 5.75% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.45%.
• Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
• ALTRIA GROUP INC's earnings per share declined by 43.9% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, ALTRIA GROUP INC reported lower earnings of $1.64 versus $1.87 in the prior year. This year, the market expects an improvement in earnings ($2.21 versus $1.64).

Altria Group, Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes, smokeless products, and wine in the United States and internationally. Altria Group has a market cap of $66.38 billion and is part of the consumer goods sector and tobacco industry. The company has a P/E ratio of 17.1, below the S&P 500 P/E ratio of 17.7. Shares are up 4.3% year to date as of the close of trading on Thursday.

You can view the full Altria Group Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE

For more information on Altria Group Inc. click any of the following:

• Altria Group Inc. Stock Price

• Altria Group Inc. Analyst Ratings

• Altria Group Inc. Key Stats & Profile

• Altria Group Inc. Earnings

• Altria Group Inc. Ratio Comparison

• Altria Group Inc. Growth Rates

• Altria Group Inc. Balance Sheet

• Altria Group Inc. Cash Flow

• Altria Group Inc. Income Statement