Altria: An Overpriced Melting Ice Cube

Jason Russ663 FollowersFollow5ShareSavePlay(7min)Comments(2)SummaryAltria boasts exceptional ROIC, margins, and shareholder returns but faces secular revenue decline as its core business contracts.MO's dividend yield is robust at 6.3%, and the company consistently reduces both shares and debt, though debt remains elevated from the JUUL misstep.Valuation multiples are at the high end of recent history; I require a forward P/E near 10 for a margin of safety.Smokeless products are the only credible growth avenue; absent success here, MO remains a predictable, slow-decline 'melting ice cube.' Nuttawan Jayawan/iStock via Getty Images Over the last 30 years, I have bought and sold Altria (MO) many times. Altria is an incredible company from the point of view of several important financial metrics. And, of course, it has one major flaw: itsThis article was written byJason Russ663 FollowersFollowJason has been actively investing for over 35 years. He is a fundamental investor who was inspired by such legends as Graham, Buffett, and Lynch. His approach to stock selection has been very successful over that time and has allowed him to retire early in order to focus on his investments full time.His approach is to always prioritize value and that often means moving in contrarian ways. He looks for undervalued assets, income opportunities, and underpriced growth prospects. While he does not focus on particular sectors, his philosophy precludes most small-cap or speculative investments.Jason's motivation for writing on Seeking Alpha is to share knowledge. He hopes that his articles not only help readers to become better investors, but that readers also help him become better.Disclaimer: Jason reminds investors to always do their own due diligence on any investment, and to consult their own financial adviser or representative when necessary. Any material provided is intended as general information only, and should not be considered or relied upon as a formal investment recommendation.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.