Buy Philip Morris for Its 3.8 percent Yield

During the last years Philip Morris International Inc. has carried out very shareholder friendly policies. The cigarette maker has been involved a massive share repurchase program and has been growing its dividend annually since its spin off from Altria in 2008. The tobacco firm has as well improved its revenue gradually while also taking benefits of low interest rates to lower its interest expense. Philip Morris is a common example of a high quality dividend stock with solid revenue growth. Therefore, Philip Morris is one of biggest holdings.

PMI Brands

PMI’s cigarette brands

Philip Morris is presently trading for $88.72 as of November 23, 2012. With its present quarterly dividend of $0.85, the yield means $3.40 per year, or 3.8 percent.

Philip Morris International has been rising its dividend gradually over 13 percent since its spin off from in 2008. Its 2008 annually dividend was $1.84 in comparison to present dividend of $3.40, this is comparable to a 84.8 percent raise in the dividend in only five years.

Philip Morris International has also been involved a severe share repurchase program since 2008. The firm has repurchased almost $26 billion to date. This is around 22 percent of the overall shares outstanding since the company was spun off.

Philip Morris International, the maker of popular Marlboro and Parliament cigarettes, has been growing its revenue at a consistent rate if excluding the influence of currencies. For third quarter 2012 Philip Morris revealed $1.32 in eps, down 2.2 percent compared to the $1.35 revealed in the third quarter 2011. Not including currency, revealed eps got in at $1.39, up 3.0 percent. Till 2012 eps growth has averaged over 15 percent per year not including currencies. YTD adjusted EPS ex currency increases 10.9 in comparison with 2011. The tobacco firm has expected a mid to long term currency neutral eps growth rate of 10 to 12 percent. YTD net earnings grow 5.4 percent not including currency in comparison with 2011. YTD adjusted OCI excluding currency and acquisitions increased 6.9 percent in comparison to 2011. YTD Organic cigarette volume has grown 0.7 percent comparison with 2011.

Philip Morris International has averaged a 62 percent dividend payout ratio in the course of the previous eight quarters. During the third quarter the payout ration had been 61 percent in comparison to the 57 percent payout ratio during the third quarter 2011.

The tobacco company has carried out a great job improving its balance sheet since its spin off in 2008. The regular coupon yield for its long term debt has dropped 24 percent from 5.5 percent in 2008 to a determined 4.2 percent in 2012. The regular time to readiness for its long term debt has elevated 3 years from 7.1 years in 2008 to 10.2 years in 2012.

Philip Morris International is a great choice for those searching for a high present yield and dividend growth.

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