Operating Margin - Altria Group Inc (NYSE:MO)

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Price: 58.57 USD -0.07%

Market Cap: 98.3B USD

52%

Current

49%

Average

10.9%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

52%

Operating Profit

12.2B

Revenue

23.4B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
US		Altria Group Inc NYSE:MO	98.3B USD	52%
US		Philip Morris International Inc NYSE:PM	250.3B USD	39%
UK		British American Tobacco PLC LSE:BATS	92.8B GBP	14%
JP		Japan Tobacco Inc TSE:2914	10.2T JPY	13%
IN		ITC Ltd NSE:ITC	5.1T INR	29%
UK		Imperial Brands PLC LSE:IMB	25.4B GBP	11%
SE	S	Swedish Match AB F:SWMC	15.2B EUR	41%
KR		KT&G Corp KRX:033780	15.7T KRW	20%
CN		Smoore International Holdings Ltd HKEX:6969	76.1B HKD	13%
ID		Hanjaya Mandala Sampoerna Tbk PT IDX:HMSP	84.9T IDR	8%
IN		Godfrey Phillips India Ltd NSE:GODFRYPHLP	444.7B INR	17%

Altria Group Inc
Glance View

Economic Moat

None

Market Cap

98.3B USD

Industry

Tobacco

Altria Group Inc., a formidable presence in the American corporate landscape, traces its lineage back to the tobacco giant Phillip Morris Companies Inc. Over the years, Altria has masterfully navigated the tumultuous waters of the tobacco industry, maintaining its dominance through strategic branding, robust market positioning, and relentless adaptation to regulatory challenges. The company earns its revenue primarily through its iconic Marlboro brand, which remains a leading choice among U.S. smokers. This brand loyalty, fortified by comprehensive marketing campaigns and unwavering product consistency, continues to drive Altria's profitability. However, as traditional cigarette consumption faces a gradual decline due to increasing health consciousness and regulatory pressures, Altria embarked on a diversification strategy, broadening its portfolio by investing in smokeless tobacco products and emerging markets such as cannabis and e-vapor through strategic partnerships and acquisitions. Altria’s approach to generating revenue is deeply entrenched in its ability to leverage its vast distribution networks and unparalleled expertise in navigating intricate regulatory frameworks. The company has diversified its product offerings, seeking to capture a changing consumer base with its subsidiaries like UST, which specializes in smokeless tobacco, and a significant stake in JUUL Labs, a prominent player in the e-cigarette market. Moreover, Altria has ventured into the nascent cannabis industry, seizing opportunities by acquiring stakes in Cronos Group. This aligns with the company's strategy to expand into adjacent markets that promise growth, thereby offsetting the challenges facing its core tobacco business. While Altria's financial performance continues to hinge on its traditional tobacco sales, these strategic expansions illustrate its efforts to redefine itself amid a transforming industry landscape, positioning it for sustained relevance and profitability.

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MO Intrinsic Value

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What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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Altria Group Inc
NYSE:MO