Philip Morris International (NYSE:PM)

CAPS Rating: 4 out of 5

The company manufactures and sells cigarettes and other tobacco products in markets outside of the United States.

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Member Avatar CellBlock9 (89.07) Submitted: 3/29/2015 10:31:50 AM : Outperform Start Price: $77.25 PM Score: +5.62

mgk, s&p 3 star, 76.79

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Member Avatar HOGridin (72.13) Submitted: 2/9/2015 12:59:26 PM : Outperform Start Price: $80.15 PM Score: +0.86

consistent dividend player while rates are low for other fixed income products and opens investors to international markets

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Member Avatar pf105 (< 20) Submitted: 1/22/2015 4:32:48 AM : Outperform Start Price: $83.98 PM Score: -4.50

Smoking is here to stay and so is PM.

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Member Avatar TMFEdyboom223 (96.76) Submitted: 1/15/2015 3:25:00 AM : Outperform Start Price: $82.07 PM Score: -1.99

Assuming you're ok with owning a cigarette company, I don't see how this could go wrong anytime soon. While smoking rates decline in the US, rates are increasing in other markets, and that's where PM is focused. Add on their 4.8% dividend yield, a reasonable PE and it's up less than 10% in the past 2 years when the market's been up significantly more, and it looks like a solid buy.

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Member Avatar Volke (71.60) Submitted: 11/6/2014 7:50:26 PM : Outperform Start Price: $85.37 PM Score: -6.54

Good vice stock with potential for international growth.

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Member Avatar nrynn (23.34) Submitted: 9/25/2014 11:35:22 AM : Outperform Start Price: $81.93 PM Score: -5.60

This is a good time to invest in this retirement stock.

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Member Avatar tsunamied (81.03) Submitted: 5/21/2014 6:54:40 AM : Outperform Start Price: $81.31 PM Score: -10.01

dividends baby

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Member Avatar JamesBrown (45.09) Submitted: 5/9/2014 9:37:56 AM : Outperform Start Price: $82.35 PM Score: -12.04

Rising Dividends

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Member Avatar KenN513 (< 20) Submitted: 4/27/2014 12:49:31 AM : Outperform Start Price: $80.71 PM Score: -9.87

This company's dividend yield is 4.5% and the dividend has grown 10.1% during the last five years. The Chowder Number is 14.6%. The company is fairly priced at about $84. I would like to see the payout ratio lower, however. Not a super high flyer, just steady, better than S&P 500 growth.

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Member Avatar mwaqar (< 20) Submitted: 4/22/2014 3:43:52 AM : Outperform Start Price: $79.53 PM Score: -8.24

Big upside

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Member Avatar afewgoodstocks14 (< 20) Submitted: 4/10/2014 4:21:58 PM : Outperform Start Price: $78.24 PM Score: -10.01

Div. (Yield) $3.76 (4.5%)

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Member Avatar 20Punches (49.79) Submitted: 4/1/2014 3:33:06 PM : Outperform Start Price: $78.17 PM Score: -6.12

Punch #10 - Q12014 – will be Phillip Morris International (PM)

“I'll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty.” – Warren Buffett

Phillip Morris International sells Malboro, and other brands, in all available markets outside of the U.S. The old Phillip Morris (before the MO and PM split) was (I’m fairly certain) the most profitable stock of the 20th century.

The industry has gotten a lot of negative press (even moreso than usual for the tobacco industry) due to increased anti-tobacco activism. These issues are nothing new for PM, and the tobacco company shareholder *should* continue thrive for at least another generation or two, in my opinion. As the industry slowly declines, PM’s dominant position will probably continue to widen. It’s extremely unlikely that any new, meaningful competitors will enter this industry, and PM stands poised to swallow up smaller competitors as the industry slowly declines. It may seem odd, but PM’s moat is actually strengthened by a slowly declining industry. (See Bruce Greenwald’s book “Competition Demystified” for more on that phenomenon) These recent sell ratings, general tobacco pessimism, and PM’s relatively poor stock performance (PM has been flat while that market is up over 35% over the past 20+ months) are all BUY signals, in my view.

While overall volumes will surely decrease overtime, price increases should be more than able to compensate, so revenue should remain pretty steady for the foreseeable future. Any tax increases imposed can be easily passed down to the customer as well. Virtually no business has pricing power as extreme as PM does. Also, they operates in so many countries, that it is pretty well diversified from individual regulation. The economics of PM are so insanely good, that per-share profits should continue to increase for the foreseeable future, albeit much more slowly than they have in the past. Also, don’t forget that tobacco companies provide A LOT of tax revenue to the countries they operate in, and most governments really need revenue right now. It is not in any governments economic interest to make smoking illegal.

Consider this scenario: if net income grows at just 4% per annum over the next 5 years, and buybacks continue at 4% of shares outstanding per annum – both reasonable assumptions - than EPS will grow to around $7.83 over the next 5 years. Put a reasonable 15x multiple on that, you get a share price around $117 in 5 years. If you put a conservative 4% per annum growth rate on the dividend as well, PM will pay you about $20 in dividends over the next 5 years. $117 + 20 = $137 total return, which from today’s price of $81.92, translates into a 10.8% annualized total return.

That's just one of many possibilities, but considering rational range of outcomes for PM, vs that of a realatively more expensive S&P 500 (which historically returns 6-8% per year including dividends), I think PM has a very good chance of outperforming for the foreseeable future, particularly if the market doesn’t do very well overall.

And, perhaps more importantly, if I’m wrong, you’ll still do ok. (4.9% forward dividend yield provides significant downside protection as long as profits remain stable)

This, like all 20punches picks, is intended to be an asymetrical bet - heads you win big, tails you still do ok.

PM outperform.

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Member Avatar MrMonopoly (34.49) Submitted: 3/25/2014 12:51:26 AM : Outperform Start Price: $76.03 PM Score: -3.95

The export of hipsters is booming, but they might ironically smoke e-cigs.

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Member Avatar Gervais001 (61.41) Submitted: 3/12/2014 10:14:21 PM : Outperform Start Price: $74.61 PM Score: -2.77

In an age of declining cigarette sells in the US, Philip Morris is still growing markets over seas. Smart decision making by management has filled the coffers to over-flowing. Even if sells decline at a rate of 2-3% in the US this will be more than off-set by the growth overseas. With such free cash flows, growth of dividends is almost guaranteed with maybe a special dividend in the works.

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Member Avatar Gardetto (< 20) Submitted: 2/15/2014 11:19:16 PM : Outperform Start Price: $75.64 PM Score: -4.73

Philip Morris International has been battered over the last few months but will be buoyed by it's nearly 5% dividend yield. Although there are no major catalysts in the near to medium term for significant capital appreciation, I'm confident the stock is a good place to park some loose change over the next several months.

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Member Avatar Guru (< 20) Submitted: 2/10/2014 12:21:51 PM : Outperform Start Price: $74.51 PM Score: -5.99

PM will gain significantly with impending recovery in Europe, Asia and Latin America.

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Member Avatar jsch08 (32.36) Submitted: 1/28/2014 11:26:18 AM : Outperform Start Price: $76.15 PM Score: -8.94

People still smoke

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Member Avatar sagitarius84 (48.24) Submitted: 1/24/2014 6:58:50 PM : Outperform Start Price: $76.98 PM Score: -9.93

PM has attractive valuation, earnings growth, buys back stock, pays an above average and growing dividend. It is a cash machine to hold for the long run

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Member Avatar afewgoodstocks11 (25.60) Submitted: 12/30/2013 11:38:05 AM : Outperform Start Price: $58.12 PM Score: -32.55

Div. (Yield) $3.76 (4.3%)
Current Yield . . . . . . .6.10%

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Member Avatar slider10 (< 20) Submitted: 11/6/2013 1:34:15 PM : Outperform Start Price: $84.88 PM Score: -21.31

Probably entering a slower growth phase than the past few years, but should still outperform the market. The company seems to be one of the better ones as far as dividends + stock buybacks.

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