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Altria: Raising My Dividend Raise Prediction

By Bill Maurer:

Back in late May, I provided an initial dividend raise prediction for cigarette giant Altria (NYSE:MO). Based on Altria’s yearly guidance and payout target, I estimated a $2.05 to $2.08 range for the annual dividend when the 2014 raise came. I promised investors that I would return with an update later in the year if I felt a change to my range was needed, and so I am here for that now. Today, I’ll detail why I am raising my range for Altria’s new dividend.

Adjusted EPS forecast raise:

The first reason why I am updating my range is because the company raised its adjusted diluted EPS forecast for 2014. Altria maintains a dividend payout ratio target equal to about 80% of this adjusted EPS number, so a raise in the forecast makes me believe a larger dividend raise is coming. When Altria reported second quarter earnings, the company

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