Altria Group Inc (NYSE:MO) is trading at $43.91. The stock appears to establish a new support level at $43. Here is why we think Altria Group is a strong buy.
Altria Group operates in a consumer defensive industry. Despite economic downturns, the demand for tobacco and related products continues to grow. Altria Group is investing in smokeless products. Recently, the company has shown interest in trying the cannabis industry.
Altria Group has strong earnings. The ROE is more than 520%. Altria Group has a forward EPS of $4.84, bringing the forward PE to 8.93. Our analysis considers this to be a fair valuation of the stock. The most notable feature of the stock is the dividend yield of 8.34%. Altria Group is certainly an attractive dividend stock.
Altria Group hit a bottom and is turning bullish
Source – TradingView
Technical analysis shows that Altria may have established a new support level at $43. Last week, the stock recorded a low of $41 before closing at $43. That price coincided with the largest MACD divergence of -1.31. The RSI was recorded at 35 and had since then turned up to 35.90. We think the trend on the RSI is an early signal of a bull market. The stock hit a bottom and will likely rise to $52 by the end of July.
Summary
Altria Group is a strong buy. The stock is establishing support at $43. Altria Group is attractive for its strong ROE and the high dividend yield of 8.34%.
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