On January 30, 2015, Altria Group Inc. (NYSE:MO) posted the earnings reports of the year 2014 together with the financial reports of the fourth fiscal quarter. The reports were disclosed before the market opened. The diluted EPS (earnings per share) of the tobacco company came to a total of $0.66 with total revenues of around $4.61 billion for the 4^th quarter.  It is important to mention here that the amount excluded excise taxes; total excise taxes were reported to be around $1.65 billion.

The diluted EPS of the company was recorded to be at $0.57 for the same quarter a year back. As far as the revenues of the same quarter are concerned, the figures came to $4.4 billion. The results of the fourth quarter met the consensus estimates of Thomson Reuters. The consensus revenue and EPS were $4.53 and $0.67.For the year 2014, the company posted revenues of $17.95 billion with an EPS of $2.57. This amount excluded the excise tax of $6.58.

The figures of 2014 were more or less the same as the numbers of 2013. In 2013, the company posted total revenues of $17.88 billion with an EPS of $2.57.Altria Group Inc. (NYSE:MO) posted the guidance report for the year 2015 as well. The company expects the EPS to be in the range of $2.75 to $2.80 for the current year. Altria will be spending $200 – $250 million for capital expenditures. Market analyst companies have given the company a consensus revenue estimate of $18.18 billion with an EPS of $2.80 for the year 2015.

Altria Group Inc. (NYSE:MO) improved its quarterly dividend to $0.52 from $0.48 in the month of August 2014. The dividend yield for the company has come to 3.8 percent now. Altria paid more than $3.9 billion in the year 2014, and it paid more than $1 billion in the 4^th quarter alone. The management of the company announced that it would be looking forward to returning huge sums of cash to the stockholders by giving out dividends.

Moreover, the company is determined to maintain a target ratio of dividends to adjusted EPS as 0.8 to 1. What is more interesting to note here is the fact that the company bought some 5.3 million of its common stock shares last year 4Q, for a total of $260 million. In the year 2014, the company repurchased around 22.5 million of its shares for a total of $939 million.  Altria(NYSE:MO)allocated a total budget of $1 billion for the share buyback program.

It still has $518 remaining and the company will be completing its repurchase cycle by the end of the year 2015.The stocks of Altria (NYSE:MO) are currently being traded in the range of $53 to $54.06. It has a market capitalization of $$104.95 billion with a P/E (price to earnings) ratio of 20.75. The company saw a decline of 2.37 percent in its stock prices on Friday.

Altria (NYSE:MO) has set itself at 29% growth in its stocks in the current fiscal year, finishing way ahead of the 10% gain estimate projected by S&P 500. According to analysts, there are four major reasons that have enabled Altria (NYSE:MO) to set itself as a most favourable choice for investors to put their capital in, and how it has managed to outclass local and international competitors, the like of Reynolds American (NYSE:RAI) and Philip Morris International (NYSE:PM).

A high revenue and pay-out share: Altria (NYSE:MO) has managed a total of 4.6% in annual dividend return, which is higher than Reynolds (NYSE:RAI)’ 4.2%. These are quite remarkable when compared with the S&P predictions of 1.9% in annual dividend returns.

The annual pay-out share for the tobacco company is 88.5%, against its rival’s 86.5%. Both these companies have managed likable figures when it comes to the dividend yield, but Altria (NYSE:MO)’s figures have always shown a slight hike against Reynolds American (NYSE:RAI). For the years 2012, 2013 and 2014; a raise of 7.3%, 9.1% and 8.3% have been noted in the quarterly dividend figures.

Altria (NYSE:MO) has also won the international battle against rival Philip Morris (NYSE:PM). The later generated 4.5% in dividend, 73% in pay-out ratio and 6.4% increase in dividend, for the current fiscal year.

Strong yield on Equity: the real performance of Altria (NYSE:MO) can be measured by considering ROE (return on equity) status. Higher ROE figures indicate better yield for investor capital. Companies that have higher ROEs consider reinvesting the generated yield to expand. However, the tobacco market is declining, even in the established infrastructures. Hence, these companies prefer to pay dividends and buy-back stocks with the generated returns.

In the past 12 months, Altria (NYSE:MO) has 103.4% ROE. The ROEs for Reynolds (NYSE:RAI) and Philip Morris (NYSE:PM) are 32.1% and -91%. This is a remarkable difference, and the negative ROE of Philip Morris (NYSE:PM) is a cause of concern for investors and the company itself. However, the negative figure is due to the company’s debts engaged to buy its stocks back. As soon as the company clears its debts, the ROE is expected to return to a higher figure.

A Healthier Cash Flow: in order to get a view of the value a company awards to its shareholders is signified by the FCF percentage or the FCF pay-out share. According to latest figures, Altria (NYSE:MO) put forth 86% FCF pay-out ratio. Reynolds (NYSE:RAI) and Philip Morris (NYSE:PM) managed 92% and 66% FCF pay-out ratios, respectively. On this scale, Reynolds (NYSE:RAI) seems to be the brand that truly values its investors. However, Altria (NYSE:MO) doesn’t lag behind by a huge market, and has been improving its figures in this regard.

Altria (NYSE:MO) is also known for providing stakeholders, with large sum of dividends. In August, the company’s dividend rose from $0.48 to $0.52, with dividend yield of 4.4%. The company paid a hefty sum of $952 million in dividends in the third quarter that made the 9 months dividend payments up to $2.9 billion. That’s Altria (NYSE:MO)’s strategy to return a large sum to shareholders. The company has also been busy with repurchasing their stocks. It already conducted two buyback stock programs worth $1 billion each, in July and August. Also in the third quarter, the company repurchased 6.4 million worth of shares, with average price of $42.87 at a total cost of $275 million.

The company’s CEO also announced that at this stage, the company stands firm. Its adjusted diluted EPS is 6.2% for the third quarter, backed with strong performance from the company in terms of revenues. He expects the year to round up nicely for all parties that include the shareholders, employees as well as customers.

In the second and third quarter, the company introduced MarkTen brand e-cigarette products, in 80,000 outlets with in the western part of the U.S. In the fourth quarter, the company plans to take MarkTen into the eastern part of the country. This is in order to complete its expansion plan for the year. The company has high hopes attached to the launch of MarkTen. The coming year will prove what the product has to offer in terms of revenues.

The company also faced a decrease in shipment volumes in smokable products, but it managed to keep margin up by adjusting and raising the prices accordingly.

The 27% of brewer SABMiller that Altria (NYSE:MO) owns, showed only a $0.01 increase in EPS for the quarter, which is no different from last year. Altria (NYSE:MO) shares closed at $47.57, with only a $0.1% rise on the day. Its 52 week range fluctuates from $33.80 to $47.94, whereas the consensus by Thomas Reuters is set at price target of $45.70.

Altria (NYSE:MO) is a huge brand, with a lot of customer loyalties, who adjust their needs and desires to the company’s adjusted prices quite easily. So Altria (NYSE:MO)’s biggest challenge is to keep their customers, satisfied and on board.