Altria Group Inc (MO)

[DiscoverGold]

Altria Is An Ex-Dividend Gift
By: Seeking Alpha | August 24, 2021

Dividend investors seeking to optimize income from their investments can look at ex-dividend dates in order to time their purchases accordingly once they have made the "Buy" decision.

We all know that timing the market is extremely difficult and only very few investors consistently find the right entry points. Timing to maximize income from dividends, however, is much simpler. Buying a stock before the ex-dividend date qualifies you for the next upcoming dividend payment, whereas foregoing the next ex-dividend date should, in theory, give you a better entry price point as the stock is expected to trade with a discount on the ex-dividend date.

Altria (MO) is one of the most covered and coveted dividend stocks among dividend investors. Its dividend history is already second to none with 54 increases in 50 years and a 5-year+ CAGR of 8.7%, thus a little extra dividend income would be fantastic news for dividend investors. Also noteworthy is the fact that Altria's next dividend has not been declared yet but if it were to continue to follow its dividend track record, another modest dividend hike will be in store. While I haven't analyzed whether the ex-dividend date featuring the increased dividend behaves differently from "regular" ex-dividend dates, I personally consider it a wonderful point in time to test the strategy I will outline in detail subsequently.


Source: Author's visualization, data from Seeking Alpha

Altria is expected to go ex-dividend in mid-September (last year's ex-dividend date was on Sep 14, 2020, but interestingly, this dividend had already been declared on July 28, 2020) and although compared to its most recent history, this dividend declaration appears overdue by a couple of weeks already; it was actually on August 22, 2019, when Altria announced its penultimate dividend. Thus, I am expecting a dividend announcement this week accompanied by another light-weight dividend hike which will probably be insufficient to match the galloping inflation.

Now, let's get straight into the analysis itself!

To do so, I have analyzed how a $10,000 investment in Altria has fared so far on each of the ex-dividend dates over the last 15 years (60 observations in total) by comparing stock prices the day before the ex-dividend date, on the ex-dividend date, and the day after...

* * *

Read Full Story »»»

DiscoverGold