Altria Group, Inc. (MO) announced that its Board of Directors voted to increase Altria’s regular quarterly dividend by 7.3% to $0.44per common share versus the previous rate of $0.41 per common share. The quarterly dividend is payable on October 10, 2012 to shareholders of record as of September 14, 2012. The ex-dividend date is September 12, 2012.
The new annualized dividend rate is $1.76 per common share, representing a yield of 5.3% based on Altria’s closing stock price.
This dividend increase reflects Altria’s intention to return a large amount of cash to shareholders in the form of dividends and is consistent with Altria’s dividend payout ratio target of approximately 80% of its adjusted diluted earnings per share. Altria has increased its dividend 46 times in the last 43 years.
Recently, Altria has lowered its guidance for FY12, now expecting EPS in the range of $1.96 – $2.00, down from its prior forecast range of$2.29 – $2.33. Analysts polled by Capital IQ are expecting GAAP EPS to be $2.29.
The parent of the Marlboro brands cited one-time charges related to a plan to buy back about$2 billion of its long-term debt, and expects to record a one-time pre-tax charge of $1 billion, or$0.33 per share, in Q3 related to the early extinguishment of debt.
Altria Group has an equity summary score of 8.6 out of 10 for a Bullish outlook. Zacks Investment has a 12-month target price of $37 for Altria.