Altria: What Income Investors Need To Know About This Legendary Dividend Machine (And Why I'm Not Buying It Personally)

Personal Update Super Insane Day today (it’s 9:30 AM and I’m on my 7th thing today!) Thank you for your patience and understanding, everyone. Today’s report is a short one. ZEUS Update: V2 Math Keeps Mathing😉 Ultra ZEUS V1 is down 0.5% as the value rotation that’s been so strong to start the year has reversed (today). ZEUS is down 0.5%, while V2 is down 1/4 as much. It was up 1.4% yesterday, while the S&P declined 0.5%, and V1 was up 0.86%. V2 is really good. I look forward to pitting it against the challenger Ultra ZEUS I create on Tuesday using the Monday “Top Buy List 10 Best Value/Growth Stocks” list. I have to rebalance Ultra ZEUS to V2 (or whatever is the best option) before I go on the Connor Wedding Vacation. Lest some cataclysm befall the markets while I’m gone. V2 truly appears to be the most impressive (deceptively simple) ZEUS portfolio I’ve ever built. I’ll include a really cool analysis on Tuesday that explains the science & math behind the “magic”😉 V2 effectively is a 5-asset class portfolio, even though it appears to be This is the final part of the 4 Part series on Tobacco Dividend Aristocrats. Part 1: What Income Investors Need To Know About Tobacco: Part 1 Part 2: Philip Morris International: The Nvidia of Tobacco Dividend Aristocrats is A Buffett-Style "Wonderful Company At A Fair Price" And Is Joining Ultra ZEUS Soon Part 3: British American Tobacco: What Investors Need To Know (Another Potential Ultra ZEUS V2 Candidate) And now, let’s take a look at the final legendary tobacco aristocrat: Altria, the greatest-performing stock in history. $1 Invested in 1925 in Altria Is Worth $2.7 million Today: The Power of 100 Years of Compounding According to Blackrock, every 100 years the US stock market has been growing investor wealth (adjusted for inflation) by 1,268X. That’s the power of good investing, for the long-term. And you can see how the difference of 6% per year for 100 years is a difference of 113X more money over 100 years. That’s what we’re trying to help you achieve over time. Not literally 6% better returns (though that’s possible with disciplined financial science) but superior returns, because over the long-term, even 1% can make a difference. Small Differences Can Add Up To Life (and World) Changing Amounts Over Time Source: Perplexity Pro Ok, so let’s see how we can help members earn the kind of safe income (and historically superior returns) and whether or not Altria can help. Altria GNG Summary We're working on average multiples for 20 years (currently in beta, thank you for your patience) Source: GNG Research Source: GNG Research Altria PEGY Analysis Much Slower Growth = Warning To Altria Investors Remember that every PEGY table tells a story so let’s walk through Altria’s. Altria has historically growth at 7.2% since 2011 and now the growth rate is expected to only be 3%. The current PE of 11 and yield of 7% seems attractive…in isolation. But through the PEGY lens, we can see that the growth rate has slowed to such a point that in order to achieve historical returns (11% to 12% CAGR) of recent years, the PE would have to be 8.7% because the PE would have to fall to just under 9. That’s what would compensate investors for the slower growth. With a 3% growth rate, investors in Altria could expect 10% total returns long-term (which is awesome!) BUT there is a risk that IF the growth rate does come in at sub 3%, for a stock priced for 3.5%, the PE ratio could compress, and thus over the next 5 years a roughly 5% multiple compression drag could reduce returns from 10% (yield + growth) to 5% (25% historical overvaluation over 5 years). In other words, there is a 2 fold risk to Altria. The first is that volume declines continue to remain elevated or even accelerate (due to pressure from discount brands, due to inflation-scarred consumers losing brand loyalty). The other is t