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A diverse portfolio of stocks will always have winners and losers. Of course, in an ideal world, all your stocks would beat the market. One such company is Altria Group, Inc. (NYSE:MO), which saw its share price increase 26% in the last year, slightly above the market return of around 23% (not including dividends). However, the stock hasn't done so well in the longer term, with the stock only up 6.6% in three years.
So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.
See our latest analysis for Altria Group
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Altria Group was able to grow EPS by 20% in the last twelve months. This EPS growth is significantly lower than the 26% increase in the share price. So it's fair to assume the market has a higher opinion of the business than it a year ago.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that Altria Group has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Altria Group's financial health with this free report on its balance sheet.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Altria Group, it has a TSR of 37% for the last 1 year. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
A Different Perspective
It's nice to see that Altria Group shareholders have received a total shareholder return of 37% over the last year. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 10% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Altria Group better, we need to consider many other factors. For example, we've discovered 2 warning signs for Altria Group (1 doesn't sit too well with us!) that you should be aware of before investing here.