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Philip Morris International: Growing Income Investment With Yield Of 7.7% And An Inelastic Product

Published Wed, 25 Mar 2020 19:17:25 -0400 on Seeking Alpha

Philip Morris's dividend has increased for 12 of the past years in a row and presently has a yield of 7.7%, which is well above average.
Philip Morris's dividend is estimated to be increased in September 2020 to $1.22/Qtr. or a 4% increase from last year.
Philip Morris's three-year forward CAGR of 6% is fair and will give you solid growth with the increased earnings from heated tobacco products worldwide.
Philip Morris International's total return underperformed the DOW average for my 51-month test period by 8.72%, which is not great, but the PE is very low at 11, creating a good entry point.
Philip Morris International (NYSE: PM) is a buy for the dividend income investor that also wants to take advantage of the overdone stock price dip. Philip Morris International is one of the largest manufacturers and distributors of smoking products. PM is a conservative investment for the income investor who also wants a moderate growth estimate of 6% that is increasing since the FDA approval of IQOS.

Philip Morris International is 4.8% of The Good Business Portfolio (a full position). The company has slow growth and has the cash it uses to increase the dividends each year.
I use a set of guidelines that I codified over the last few years to review the companies in The Good Business Portfolio (my portfolio) and other companies that I am considering. For a complete set of guidelines, please see my article "The Good Business Portfolio: Update to Guidelines, August 2018". These guidelines provide me with a balanced portfolio of income, defensive, total return, and growing companies that hopefully keeps me ahead of the Dow average.
When I scanned the five-year chart, Philip Morris has a poor chart going up and to the right in a steady, strong slope for three of the five years with a downturn starting in 2018 when the FDA started to investigate vaping and other smokeless products. Recently, the PM stock price has gone down with the market... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
EATON VANCE ENHANCED EQUITY INCOME FUND II 16.99   0.0 0.00 0.00 7.02
OMEGA HEALTHCARE INVESTORS 41.16   32.4 1.27 2.64 6.57
JOHNSON & JOHNSON 130.43   21.6 6.03 3.80 2.93
HOME DEPOT 233.80   23.3 10.04 5.44 2.33
BOEING 375.63   44.0 8.54 8.22 2.22
DANAHER 141.74   41.6 3.41 0.68 0.50

EATON VANCE ENHANCED EQUITY INCOME FUND II - EOS
EATON VANCE ENHANCED EQUITY INCOME FUND II - EOS  


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