There are two traditions in America that a person can set their watch to during the month of August. The first tradition is the Back-To-School period, which we used to dread when we were kids. The second tradition isn’t as well known, but it is something that we have been looking forward to since 1999. This tradition is the annual dividend increase from Altria Group (formerly known as Philip Morris Companies). We have written about the long and proud tradition of Altria Group’s (MO) dividend increases, which takes into account adjustments for the Philip Morris International (PM) and Kraft (KFT) spin-offs.
Altria has increased its adjusted annual per share dividend 46 times in the last 44 years. Philip Morris has increased its dividends since its 2008 spin-off at a compounded annual growth rate of 13.1%. Kraft increased its quarterly per share dividend twice since its 2007 spin-off, by $.02 in September 2007 and $.02 in September 2008. While Kraft has not increased its dividend since 2008, we have noticed that it has bolstered its cash position from $239M in 2006 (when the spin-off was announced) to $4.643B in H1 2012 (Kraft’s last quarter before its spin-off of Kraft Foods Group and its impending name change to Mondelēz).
On August 24th, Altria increased its quarterly per-share dividend by $.03. In our June 11th report on Altria, we had implicitly predicted that the company would increase its quarterly per share dividend by $.03 based on our estimated annual dividend declarations of $1.70 per share for 2012 and our estimate of $2.21 in adjusted EPS for Altria.