Published Thu, 22 Oct 2020 02:28:57 -0400 on Seeking Alpha
Seeking AlphaDividend Ideas | Consumer Philip Morris Has It All - A Growing 6.5% Yield, Value, And Earnings GrowthOct. 22, 2020 2:28 AM ET|| About: Philip Morris International Inc. (PM), Includes: MOby: Gen AlphaGen Alpha Long Only, Value, Growth, Growth At Reasonable PriceSummaryThe market has given PMI's shares a knee-jerk reaction based on Q3 results, and I see this as being largely unwarranted.
PMI's reduced-risk products continue to gain traction, and now represent nearly a quarter of total revenue.
The shares currently offer an attractive combination of value, EPS growth, and dividend growth.
In the currently expensive market, it’s difficult to find growth stocks that are also trading at an attractive value point. This basically means that investors who are looking for growth need to be prepared to pay up for it. In this article, I’m focused on Philip Morris International (PM), which seems to provide both growth and value, plus an attractive and growing dividend yield to boot. I evaluate what makes PMI an attractive investment at the current price; so let’s get started.
(Source: Company website)
A Look Into PMI
PMI is the largest tobacco company in the world by market capitalization, and has 46 manufacturing facilities globally. In addition, it also has 25 third-party manufacturers across 23 markets, and 38 third-party hand-rolling operators in Indonesia, the largest tobacco market outside of China. It owns and manufactures both the well-known Marlboro and IQOS heated tobacco brands.
The current pandemic has made for a challenging operating environment, as social restrictions in many countries have reduced tobacco consumption. This was reflected in PMI’s Q3 results, with revenue declining by 2.6% YoY (1.5% decline on an organic basis) and shipment volume declining by 7.6% YoY. These appear to be the primary contributing factors to the negative share price reaction, since the earnings release.
As seen below, the market... Read more
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