MO Has Returned $74 Bil To Shareholders In A Decade
In the last decade, Altria (MO) has returned a notable $74 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 has returned the 30th highest amount to shareholders in history.
| MO | S&P Median | |
|---|---|---|
| Dividends | $59 Bil | $4.5 Bil |
| Share Repurchase | $15 Bil | $5.5 Bil |
| Total Returned | $74 Bil | $9.1 Bil |
| Total Returned as % of Current Market Cap | 67.6% | 25.0% |
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 companies like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.
Single stock can be risky, but there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Should you buy one stock you like or build a portfolio designed to win across cycles? Our numbers show that High Quality Portfolio has turned stock-picking uncertainty into market-beating consistency. This portfolio is incorporated in asset allocation strategy of Empirical Asset Management – a Boston area wealth manager and Trefis partner – whose asset allocation framework yielded positive returns during the 2008-09 period when the S&P lost more than 40%.
Top 10 Companies By Total Shareholder Return
| Total Money Returned | As % Of Current Market Cap | via Dividends | via Share Repurchases | |
|---|---|---|---|---|
| AAPL | $847 Bil | 22.1% | $141 Bil | $706 Bil |
| MSFT | $364 Bil | 9.3% | $165 Bil | $199 Bil |
| GOOGL | $343 Bil | 11.3% | $12 Bil | $331 Bil |
| XOM | $212 Bil | 42.9% | $145 Bil | $67 Bil |
| WFC | $208 Bil | 79.8% | $59 Bil | $150 Bil |
| JPM | $174 Bil | 20.2% | $0.0 | $174 Bil |
| META | $167 Bil | 9.2% | $6.4 Bil | $160 Bil |
| ORCL | $161 Bil | 19.5% | $34 Bil | $126 Bil |
| JNJ | $157 Bil | 34.6% | $104 Bil | $52 Bil |
| CVX | $153 Bil | 57.6% | $97 Bil | $55 Bil |
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. Companies like META and 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 MO Stock for more details)
MO Fundamentals
- Revenue Growth: -0.2% LTM and -0.9% last 3-year average.
- Cash Generation: Nearly 43.1% free cash flow margin and 59.0% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for MO was -1.9%.
- Valuation: MO trades at a P/E multiple of 12.5
- Opportunity vs S&P: Compared to S&P, you get lower valuation, lower revenue growth, and better margins
| MO | S&P Median | |
|---|---|---|
| Sector | Consumer Staples | – |
| Industry | Tobacco | – |
| PE Ratio | 12.5 | 23.9 |
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| LTM* Revenue Growth | -0.2% | 5.2% |
| 3Y Average Annual Revenue Growth | -0.9% | 5.3% |
| Min Annual Revenue Growth Last 3Y | -1.9% | -0.1% |
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| LTM* Operating Margin | 59.0% | 18.6% |
| 3Y Average Operating Margin | 57.1% | 17.8% |
| LTM* Free Cash Flow Margin | 43.1% | 13.3% |
*LTM: Last Twelve Months
That’s a good overview, but evaluating a stock from an investment perspective involves much more. That is exactly what Trefis High Quality Portfolio does. It is designed to reduce stock-specific risk while giving upside exposure.
MO Historical Risk
That said, MO isn’t immune to big drops. It fell about 64% in the Dot-Com crash and nearly 81% during the Global Financial Crisis. Even the smaller pullbacks, like the 2018 correction and Covid pandemic, led to declines of around 42% and 39% respectively. The recent inflation shock knocked it down another 26%. So, no matter how strong the fundamentals, this stock can still take a serious hit when markets turn sour.
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.