Many investors believe that Altria 's (NYS: MO) best days of rewarding shareholders are behind it. Many of the big catalysts, such as international growth and an increase in smoking rates, are the things of yesteryear.
However, the company still has one big ace up its sleeve: a large position in SABMiller. The holding company is one of the largest and most influential alcoholic-beverage companies in the world yet is carried at a significant discount to its true value on Altria's balance sheet. That's because Altria owns only 30% of the company, and accounting practices allow it to effectively understate the value of that position.
Not only does its stake in the company pay big dividends back to Altria each year, but if it wanted to unlock a lot of value, Altria could always divest its position in SABMiller.
That's not to mention the company's phenomenal dividend, which should continue to fuel outperformance for the near and short term. But if big tobacco dividends aren't your cup of tea, there are other options out there. We recommend reading "The 3 Dow Stocks Dividend Investors Need." Like Altria, these three companies have paid a hefty dividend for a long time and continue to trounce the broad market. Just click here to read more today.
The article 1 Huge Dividend's Hidden Weapon originally appeared on Fool.com.
Austin Smith owns shares of Philip Morris International. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Philip Morris International. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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