Yesterday, shareholders of Altria
Shares of Altria appreciated only 1%, since the spinoff has been widely expected for some time now. Although the precise timing of the spinoff is not expected to be announced by the board until January 2008, the move is a positive development for shareholders nonetheless. The move will enable the international division to chase a higher valuation for shareholders and continue to pursue swelling growth abroad, while remaining unhindered by slumping cigarette sales volume in the U.S. and pestering litigation concerns.
In another positive development for Altria shareholders, the company announced it will up its quarterly dividend 8.7% to $0.75 per quarter. The dividend increase, which has become an annual ritual of sorts, pushes the tobacco maker's yield to 4.3%.
I continue to view big tobacco as an attractive long-term investment. Shares of Altria, as well as competitors Reynolds American
Despite a 3.3% decrease in cigarette volume in the U.S. in its Q1, Altria continues to adapt soundly to its global business environment. Its international shipment volume actually increased by 3.3% in Q1 on a year-over-year basis, and the company continues to forge ahead with its long-term plans to test the waters of a growing smokeless tobacco market. Yesterday's announced spinoff should be viewed as an encouraging step for the company, and it'll likely benefit shareholders in the quarters ahead.
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Fool contributor Billy Fisher owns shares of Altria and Reynolds American. The Fool's disclosure policy is smoke-free.
