Tuesday, March 24, 2015

Recent Buy - Philip Morris (PM)

I didn't think I would be making another purchase this month but one stock that's been on my watch list for some time had it's ex-div date this week so I couldn't resist. This time around I chose Philip Morris (PM). PM has been struggling recently battling a strong US dollar and analyst downgrades. I believe that there is a good buying opportunity here with the stock currently yielding over 5%. These are yields the company has not seen since 2010. The strong yield coupled with a 5 year dividend growth rate of 12% makes it hard to resist for any dividend investor.

I purchased 14 shares of Philip Morris (PM) at $79.50

PM is not without it's troubles though. The increasing regulations, lawsuits, and taxes can spell serious trouble for the company going forward. Volume declines continue to be a concern as well as plain packaging legislation.

Philip Morris International, Inc. is a Virginia holding company incorporated in 1987. The Company's subsidiaries and affiliates and their licensees are engaged in the manufacture and sale of cigarettes and other tobacco products in markets outside the United States of America. Its portfolio comprises both international and local brands. Its portfolio of international and local brands is led by Marlboro.

Philip Morris (PM) Stock Chart

Philip Morris (PM) Basic Statistics
  • Ticker Symbol: PM
  • PE Ratio: 20 (17 forward p/e)
  • Sector: Consumer Goods
  • Yield: 5%
  • Dividend Growth: 7 years 
  • 5 Year Dividend Growth Rate: 12.2%
  • Payout Ratio: 82 %
  • Market cap: $119b
  • Beta: 1.03
  • Website: http://www.pmi.com

Philip Morris (PM) Dividend Growth Chart


Philip Morris (PM) EPS Growth Chart


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13 comments:

  1. My DividendsMarch 25, 2015 at 6:29 AM

    Captain,
    great buy! I still have PM on my watchlist, and it would be probably the best time now to enter a position or increase a position. Unfortunately I don't have enough free capital to enter it. But lets see how the stock price will develop next weeks!
    Rgds,
    Patrick

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    Replies
    1. Captain DividendMarch 25, 2015 at 6:23 PM

      Well I wanted to get in before the ex-div date so I had to buy, it was the last day to do so. Disregarding that I would have loved to get in at the prices today after the markets tanked nearly 300 points!

      Delete
  2. No More WafflesMarch 25, 2015 at 7:30 AM

    Captain,

    If PM was anything but a tobacco company I'd probably be all over it too. The numbers here are very solid, apart from the relatively high payout ratio.

    I hope this purchase will do you much good in the future!

    Cheers,
    NMW

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    Replies
    1. Captain DividendMarch 25, 2015 at 6:31 PM

      I can understand the stigma behind big tobacco and I can't blame anyone for not wanting to touch it. The payout ratio is a bit high from a historical perspective. Even just last year the payout was only about 68% so it's something well have to keep an eye on, certainly not a deal breaker here though. Most tobacco companies have a high payout ratio though, I believe the tobacco industry median is 78% so were just above that range.

      Delete
  3. ADDMarch 25, 2015 at 5:26 PM

    PM continues to be on my watchlist as well but currently I'm holding off on investing. I do not foresee the stock rallying much from these levels right now so I think there will be plenty of time in the future to make another investment.

    Congrats on the new addition. Hope it pays off for you well!

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    Replies
    1. Captain DividendMarch 25, 2015 at 6:35 PM

      It's been on my watch list for a while too. I was toying around with the idea of selling my shares in Lorillard (LO) and using those funds to buy PM but I just couldn't do it. You may well be right about the stock being unable to rally battling a strong dollar. I'll keep monitoring PM and will continue to add if goes lower.

      Thanks for stopping by ADD !

      Delete
  4. A Frugal Family's JourneyMarch 25, 2015 at 8:46 PM

    Nice buy Captain...PM appears to be the clear winner in our recent Ask The Reader post so I will be picking up a few shares myself tomorrow.

    Glad to be a fellow shareholder...Cheers to 5% dividends! AFFJ

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  5. Dividend Growth JourneyMarch 26, 2015 at 2:27 PM

    Nice purchase Captain. I also purchased PM earlier this month at just over $80/share to add to my position.

    https://dividendgrowthjourney.wordpress.com/2015/03/07/recent-purchase-pm/

    Glad to be a fellow shareholder.

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  6. AnonymousMarch 27, 2015 at 2:58 PM

    Great minds think alike. I scooped up some PM stock last week. Gotta love the dividend!

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    Replies
    1. AnonymousMarch 27, 2015 at 2:59 PM

      Forgot to add that I soldout my LO stocks. Just focused on PM and MO now. Best of luck to you.

      Delete
  7. FrugalitytoFinancialFreedomMarch 31, 2015 at 3:06 PM

    CD,
    PM is right there on top of my 'to buy' list. I am just waiting for April (thats tomorrow) so I can buy PM for my regular monthly purchase. Hopefully it stays lower.

    Take, care,
    FFF

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  8. DivHutMarch 31, 2015 at 4:02 PM

    Great pick up with PM. Several dividend bloggers have been buying into this stock in recent weeks. At current prices the valuation is pretty good considering PM still has pretty decent growth prospects. Of course, that juicy yield does not hurt either. Thanks for sharing.

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  9. DivindependenciaMay 1, 2015 at 4:21 AM

    I like PM, but the profit could be lower due to €/$ exchange. I'm going to wait for lower prices close to 70$-72$.

    Thanks for share your information!!

    ReplyDelete

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