I'm Worried About MO

[fenders53]

(12-21-2021, 09:53 AM)Kerim Wrote: Hmm. Looking at annual reports for the past 5 or 6 years, it looks like MO is not weathering this storm from a big cash pile. Cash and equivalents, and total current assets have stayed pretty static in the $4 to 7 billion range from 2015 to present. That's not enough to meet the dividend commitment, much less along with other costs. The number that does seem to be changing a lot is debt. 

Long-term debt was 12 to 14 billion in 2015/2016, but up to 27 billion in the 2020 report, though it does seem to be down a hair in the Q3 2021 report.

Given MO's revenue stream and the current interest rate environment, I don't think any of that is horrifying. But I certainly wouldn't characterize it as safe, sustainable, or healthy.

I guess I'm not inspired to jump over to my brokerage to sell. But I'll be looking at Q4 and the next AR incredibly closely.

Sounds rational to me.  There is also nothing stopping you from trimming gradually over time while you assess the future. That tends to work better for me actually.  BTW you would be mocked for daring to question MO on some other forum echo chambers.  I like this place.  

There is a very good reason why MO-T-XOM etc. have, or still have a way above market average yield.  Obviously share prices fell while most everything quality is up 50-200% the past 5 years.  If you bother to know what you truly own with CURRENT financials, that makes you a  better investor.  Just hoping things are as they were five or ten years ago is just that, hoping.  

On a side note MO and T have taught me that  M&A is far from easy.  It goes wrong as often as it goes right.