1 dividend share yielding more than 5%

Philip Morris International Inc. (PM) operates as a tobacco company working to deliver a smoke-free future and a long-term scalable portfolio to include products outside of the tobacco and nicotine industry. The Company’s product portfolio consists primarily of cigarettes and smokeless products sold in markets outside of the United States.

PM has increased its dividends for 13 consecutive years. Its annual dividend of $5.00 yields 5.47% on prevailing prices. The company’s dividend payouts have grown at a CAGR of 3.1% over the past three years and at a CAGR of 3.8% over the past five years. Its average return over four years is 5.50%.

On July 21, 2022, Jacek Olczak, CEO, said: “We are raising our full year outlook and now expect to deliver pro forma adjusted net revenue growth of 6% to 8%, organically. , and diluted BPA. 10% to 12%, excluding currency, supported by a pro forma shipment volume of heated tobacco units of 90 to 92 billion units.

PM has lost 5.4% year-to-date and 8.3% over the past month to close the latest trading session at $89.83.

Here’s what could shape PM’s performance in the short term:

Solid sales

For the second quarter ended June 30, 2022, PM’s net revenue increased 3.1% year-over-year to $7.83 billion. It shipped 16.08 billion units of cigarettes to the Americas, up 5.7% year-on-year.

Additionally, the company shipped 34.54 billion units of cigarettes in the Middle East and Africa, up 13.8% year-on-year, while it shipped 1.16 billion heated tobacco units in the same region, up 126.2% year-on-year.

Solid profit margins

Prime Minister over 12 months gross profit the margin of 67.25% is 106.7% higher than the industry average of 32.53%. Its 12-month net profit margin of 28.58% is 441.2% higher than the industry average of 5.28%.

Additionally, PM’s trailing 12-month EBITDA margin of 44.21% is 264.1% higher than the industry average of 12.14%. Additionally, its 12-month ROTC and ROTA of 39.50% and 21.62% compare to industry averages of 6.43% and 4.74%, respectively.

The consensus rating and price target indicate upside potential.

Of the seven Wall Street analysts who rated PM, four rated it Buy, while three rated it Hold. Wall Street analysts expect the stock to hit $107.86 in the near term, indicating a 20.1% upside potential.

POWR ratings reflect promising outlook

PM has an overall rating of B, which is equivalent to buying in our own POWR Rankings system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

It has an A rating for quality, consistent with its industry-leading profit margins.

The title has a B rating for stability, in sync with its 24-month beta of 0.53.

In stock of 10 the tobacco industry, PM is ranked #4. The industry is rated A.

Click on here for additional POWR ratings for PM (Growth, Value, Momentum and Sentiment).

See all major tobacco industry actions here.

Conclusion

PM’s dividend yield above 5% could provide a stable income stream in the current market turmoil. Additionally, its EPS is expected to grow 2.3% annually over the next five years. And, given its strong profit margins, it might be worth buying the stock now.

How does Philip Morris International Inc. (PM) compare to its peers?

Although PM has an overall POWR rating of B, one might consider looking at its industry peers, Japan Tobacco Inc. (JAPAY), Imperial Brands PLC (IMBBY) and Vector Group Ltd. (RSV), which have an overall rating of B (buy).


PM shares were trading at $93.33 per share on Thursday afternoon, up $3.50 (+3.90%). Year-to-date, PM has gained 0.82%, versus a -15.70% rise in the benchmark S&P 500 over the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentary. After…

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