Predict Altria's Raise!

[TomK]

So the mighty MO should be declaring its next dividend tomorrow, and if history is any guide, it should include this year's dividend raise. Let's hear everyone's predictions!

They're at 44 cents a quarter now. In my mind, 47 is the very, very lowest end of the possible range, and 52 is about as high as I can imagine. Altria explicitly targets a payout ratio of 80%, but there are a few ways to spin that, given that future earnings are imprecise at best.

I'm going to guess they'll announce 48 cents per share tomorrow, based on my read of earnings. 48 cents would be a fine raise, though slightly conservative, and would keep the payout ratio near, but slightly under, 80 percent.

I could easily see 49 cents, and would be very happy with anything greater than that. But I'm going with 48 cents as my "official" guess.

What do others predict / guess?

Tom

[Kerim]

Why so gloomy, Tom?

It really depends how you cook the numbers here.

In the Q2 earnings statement, they revised full year guidance of adjusted EPS to a range of $2.36 to $2.41. Taking the low end of that range -- $2.36 -- and using the 80 percent target, you get a dividend of 47 cents per quarter.

However, if you look at full year 2013, with two payouts of 44 cents each, you could raise to 50 cents for the remaining two distributions in 2013 to get a total payout in 2013 of $1.88, which is just about exactly 80 percent of the $2.36 expected adjusted EPS.

I assume they are mostly looking forward, though, and would not account for the lower dividends in the first half of the year in this thinking. Nonetheless, my official prediction here is going to be 50 cents. $2.36 is the low end of the range, after all. If they do better than that, the 80 percent target gives them more room to play with.

[Horace Cugle]

I'd be very happy with a 4 cent raise but would bet on 3 cents. You never know.

[Dan Mac @DGSInvesting]

If they raise it $0.03 or higher I will be happy. If they raise it to $0.50 I will be pretty pleased as that would be a 13.6% increase. So I'm with Kerim on this one. Lets go to $0.50!

[TomK]

(08-22-2013, 03:17 PM)TomK Wrote: But I'm going with 48 cents as my "official" guess.

On the nose!

[Horace Cugle]

A very nice increase indeed, 9.1%!

[EricL]

Looks like I timed my buy pretty good. Got my first dividend raise before I even collected my first dividend.

[Kerim]

(08-23-2013, 08:30 PM)EricL Wrote: Looks like I timed my buy pretty good. Got my first dividend raise before I even collected my first dividend.

The first of very many!