Altria Stock Capital Return Hits $49 Bil

Altria Stock Capital Return Hits $49 Bil

In the last five years, Altria (MO) stock has returned $49 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let's look at some numbers and compare how this payout power stacks up against the market's biggest capital-return machines.

As it turns out, MO stock has returned the 34th highest amount to shareholders in history.

Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management's confidence in the company's financial health and ability to generate sustainable cash flows. And there are more stocks like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.

Top 10 Stocks By Total Shareholder Return

For full ranking, visit Buybacks & Dividends Ranking

What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Stocks like Meta (META) and Microsoft (MSFT) are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.

That's the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let's look at some numbers for MO. (see Buy or Sell Altria Stock for more details)

Altria Fundamentals

• Revenue Growth: -1.5% LTM and -0.9% last 3-year average.
• Cash Generation: Nearly 45.1% free cash flow margin and 59.8% operating margin LTM.
• Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for MO was -1.5%.
• Valuation: Altria stock trades at a P/E multiple of 15.9

*LTM: Last Twelve Months

The table gives a good overview of what you get from MO stock, but what about the risk?

MO Historical Risk

MO isn't immune to big drops. It fell about 64% in the Dot-Com crash and nearly 81% during the Global Financial Crisis. The 2018 correction and COVID sell-off also dragged it down close to 40%. Even the recent inflation shock caused a 26% dip. Good fundamentals matter, but when the market turns shaky, MO still takes a hit.

But the risk is not limited to major market crashes. Stocks fall even when markets are good - think events like earnings, business updates, and outlook changes. Read MO Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 - the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.