When looking for this year's potential winners, one of the most important items to consider is the recently passed tax reform bill in the United States. Domestic companies with high tax rates are likely to see strong improvement to their bottom lines, which will certainly benefit shareholders. Cigarette giant Altria (MO) is one major example of a company that is likely to benefit, and because of that the name remains one of my top long term picks.
When the company reported Q3 results a few months ago, it detailed that its effective tax rate on operations for 2017 was likely to be 35.5%. A rate that high will take a toll on any company's bottom line, and Altria is no exception. If we take a look at the 10-Q filing after the Q3 report, we see the company had an income tax provision of $2.386 billion on $7.645 billion of pre-tax income, a rate of more than 31.2% in the first nine months of the year. That number was actually down more than 420 basis points as compared to the first nine months of 2016.
