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Altria Expected to Hike Dividend About 8% Next Week -- Barron's Blog
DOW JONES & COMPANY, INC. 1:41 PM ET 8/16/2017
Symbol Last Price Change
MO 65.475up +0.175 (+0.27%)
PM 117.81up +0.99 (+0.85%)
QUOTES AS OF 03:26:30 PM ET 08/16/2017
Tobacco giant Altria Group(MO) ( MO) is expected to raise its dividend in the 7%-10% range as soon as next week. The company has a history of raising its dividend the third week in August.

IHS Markit analyst Kun Pu thinks it could hike next Friday. She writes this week:

Altria Group (MO) has consistently grown its quarterly dividends at least once a year for the past four decades, and we expect no exception. We project the company to declare a 7% increase on a per share basis to $0.65 in Q3 2017. Our forecast is based on consensus earnings growth of 8% and an expected payout range around 75-80%, in line with MO's targeted 80%. MO has delivered, on average, a total shareholder return of 30% via both dividends and buybacks for the past three years, fully showcasing management's commitment to return excess capital. With steady topline growth and margin expansion on track, we believe MO will be able to sustain its attractive dividend yield above 3%.

As Barron's covered last week, Wells Fargo analyst Bonnie Herzog says a 9% hike is " around the corner," offering it up as another reason to buy the cigarette maker on the stock's recent dip.

Tobacco stocks, including Altria's(MO) international sibling, Philip Morris International(PM) ( PM), plummeted in late July when the Food and Drug Administration announced it is targeting lower nicotine levels in its tobacco regulation.

Altria (MO) fell from the $75 rang to the $65 range after that announcement. Its current yield is 3.75%.

Altria (MO) last reported earnings in late July. It has raised its dividend 48 times in the last 50 years.

More at Barron's Income Investing blog, http://www.barrons.com/income-investing