Is Altria Group, Inc. overvalued or undervalued?

As of 28 October 2021, the valuation grade for Altria Group, Inc. has moved from very attractive to risky, indicating a shift in perception regarding its investment potential. The company appears to be overvalued, as evidenced by its P/E ratio of 14, which is significantly lower than the peer Philip Morris International, Inc. with a P/E of 44.31. Additionally, the EV to EBITDA ratio stands at 14.84, while its PEG ratio is notably low at 0.59, suggesting that growth expectations may not justify the current valuation.
In comparison to its peers, Altria's valuation metrics indicate a concerning outlook, especially with its negative book value impacting the Price to Book Value ratio, which is at -44.76. The high dividend yield of 13.83% may attract income-focused investors, but the overall financial health reflected in the ratios raises red flags. Over the past year, Altria has outperformed the S&P 500 with a return of 26.29% versus 17.14%, but its longer-term performance has lagged significantly, particularly over three and five years, where it returned 51.19% and 60.49% compared to 70.41% and 96.61% for the S&P 500, respectively.