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Altria Group Inc. Stock Buy Recommendation Reiterated (MO)

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 impressive record of earnings per share growth, notable return on equity, expanding profit margins, attractive valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:

  • ALTRIA GROUP INC has improved earnings per share by 16.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ALTRIA GROUP INC increased its bottom line by earning $2.06 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($2.40 versus $2.06).
  • 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.
  • The gross profit margin for ALTRIA GROUP INC is rather high; currently it is at 68.54%. It has increased significantly from the same period last year. Along with this, the net profit margin of 34.86% is above that of the industry average.
  • MO, with its decline in revenue, slightly underperformed the industry average of 6.8%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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 $72.9 billion and is part of the consumer goods sector and tobacco industry. Shares are up 16.1% year to date as of the close of trading on Wednesday.

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.

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