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Seeing More Upside To Altria and Its Dividend

 

I was taking a quick look today at some positions and checking for ex-dividend dates. Then I noticed that Altria (MO) hit a 52-week low on 9/1. I did a double take because there was no way that Altria was trading poorly. The 52-week was on 9/1/10 not 9/1/11. So since that 52-week low of $22.58, the stock has appreciated 20% (actually 19.97%) to close today at $27.09. Still the stock is off about 4% from its 52-week high. On top of all that, Altria shareholders scooped up another $1.52 in dividend over the last year. 

You can hate cigarettes. You can hate beer, wine and cigars also. Just don’t hate Altria. 

Where does the stock go from here? Certainly not down to its 52-week low. Rather I see the stock making a new 52-week high by the end of the year. A $30 price target by New Year’s Eve is a reasonable expectation. 

The company’s board recently boosted the quarterly dividend by 7.89% to 41 cents. Act quickly because the stock goes ex-dividend on September 13. This implies a dividend yield of 6.05%. On average Altria raises its dividend once per year, so by next time this year we should expect another bump in its payout. 

I own the stock and strongly believe that it is a great antidote to the high volatility and low interest rate environment which were are ensconced in. 

At the time of this Blog entry Scott Rothbort, his family and or clients of LakeView Asset Management, LLC was long  MO stock  --- although positions can change at any time.

For more information on investing with LakeView Asset Management, LLC please visit the company's website

You can subscribe to The LakeView Restaurant and Food Chain Report newsletter at Restaurantstox.com


 



Posted By Scott Rothbort at September 1, 2011

My Gut Feeling For Today, Sept 12, 2011

I was thinking all weekend about how Monday would play out. Funny thing is that is was not Greece or the Euro Zone or the Euro Currency that was on my mind. It was not the lingering effects of the 9/11 anniversary either. Rather I was thinking about the Egyptian raid on the Israeli Embassy in Egypt on Saturday (of course the Sabbath).

The Israeli market index, TA 100 dropped 3.41% on Sunday, mostly in response to the raid in Egypt. Part of that drop might have been a catch-up to Friday’s global sell-off when Israel was closed.

The situation in Greece and Europe can be solved. Rationality will take hold and the European economy will be repaired. It might not happen overnight but the struggle in Europe is one of socialism versus capitalism and lazy versus hard working. Some egos might be bruised along the way but there nothing that can’t be solved though negotiation and compromise between intelligent people.

There is no religious zealotry at the heart of the matter in Europe. The days of one European nation seeking to conquer another is a matter of historical academic study. I am not expecting a World War III on the European continent because of the problems facing Greece, Ireland, Portugal, Italy and Spain. Greece is not the Weimar Republic.

My bigger concern is in the Middle East where the fundamental problem is religious fundamentalism. Whether it is storming the US Embassy in Tehran, storming the Israeli Embassy in Egypt nearly 30 years later or the 9/11 attacks on the US, we are not dealing with rational human beings. This is where our risk will be coming from.

Banks can be fixed. Budgets can be balanced. The irrational behavior of someone who wants to kill you because of religious beliefs threatens both our economic, political and personal well being.

My gut says we open on the day’s lows and maybe even touch green, at least momentarily today.

 



Posted By Scott Rothbort at September 12, 2011

Europe May Get Attention But BRIC is a Risk (and Opportunity)

While everyone is looking over to Europe, some of the worst damage these last two days occurred in the emerging markets. Take Brazil for example. The Bovespa dropped 5.5% over the last two days. You might think that is not so bad. However, the Brazilian Real also declined dramatically, about 5.1%. Taken together the total loss in US Dollars was about 10.3%. That is evident when looking at the iShares Brazil ETF (EWZ) which declined 10.9% over the past two sessions.

Apparently the BRIC nations may be getting a bit hostile toward one another. That is not helping the emerging markets either. Last week Brazil placed a 3000 basis point increase in automobile tariffs. This comes after Brazil jacked up tariffs on steel imports. Presumably, the target was Brazil’s largest trading partner, China. Maybe some side discussion between Brazil and China will take place this weekend at the G-20 meeting to calm down these trade issues.

Arcos Dorados (ARCO), the Latin American franchiser of McDonald’s (MCD) restaurants took a 16% hair cut over the past few days.  Just last week ARCO announced an approximate 6 cent per share dividend. I would note that MCD has performed extremely well, declining 3.7% the past few days and rising about 14.5% on a total return basis for 2011 year-to-date. Today, Raymond James (RJF) initiated MCD and Yum Brands (YUM) with Outperform ratings. MCD was given a $95 price target and YUM a $60 price target. One thing we do know about MCD is that the company performs well in challenging economic conditions. My point is that the decline in ARCO is an opportunity to pick up a strong company at a severely discounted price.

Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView Asset Management, LLC was long ARCO and MCD stock — although positions can change at any time.

Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant and agricultural stocks. You can subscribe at www.restaurantstox.com 

You can access more daily commentary from Scott Rothbort, on Wall Street All-Stars.

 



Posted By Scott Rothbort at September 23, 2011

Scott Rothbort

About Me :

SCOTT ROTHBORT

THE FINANCE PROFESSOR

 

Scott Rothbort has over 20 years of experience in the financial services industry. In 2002, Rothbort founded LakeView Asset Management, LLC, a registered investment advisor based in Millburn, N.J., which offers customized individually managed separate accounts, including proprietary long/short strategies to its high net worth clientele. He also is the founder and manager of the social networking educational website TheFinanceProfessor.com and a frequent contributor the TheStreet.com where he also writes a weekly article as The Finance Professor

Immediately prior to that, Rothbort worked at Merrill Lynch for 10 years, where he was instrumental in building the global equity derivative business and managed the global equity swap business from its inception. Rothbort previously held international assignments in Tokyo, Hong Kong and London while working for Morgan Stanley and County NatWest Securities.

Rothbort holds an MBA in finance and international business from the Stern School of Business of New York University and a BS in economics and accounting from the Wharton School of Business of the University of Pennsylvania. He is a Term Professor of Finance and the Chief Market Strategist for the Stillman School of Business of Seton Hall University.

For more information about Scott Rothbort and LakeView Asset Management, LLC, visit the company's Web site at www.lakeviewasset.com.

 


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