Altria: Undervalued Dividend Stock According to the Dividend Discount Model

- By Ben Reynolds

There are many ways stocks can be valued. One of these, although it is only applicable for dividend-paying stocks, is the Dividend Discount Model. It is suitable for all investors, including those that are not interested in employing complicated financial models such as the Discounted Cash Flow Method, as you only need three items to employ this method: the one-year forward dividend, the dividend growth rate and a discount rate.

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• NYSE:MO) is a tobacco stock that operates in the U.S. primarily, where it sells cigarettes such as Marlboro. Altria owns other businesses on top of that, including smokeless (chewable) tobacco, a wine business, and a stake in publicly traded beer giant Anheuser-Busch InBev. Altria is trading with a market capitalization of $102 billion.