I picked up another 1/4 of my target holding in Philip Morris (PM:NYSE) bringing my total IRA account holdings up to 3/4 of target allocation. PM pays a 3.8% annual dividend yield, proceeds will be automatically reinvested.
S&P rates PM a 5 star strong buy with a 12 month target price of $83.00. Here is their risk assesment:
Our risk assessment reflects the geographicdiversity of the company’s operations andend-markets and its participation in a generallystable industry, producing ample free cash flow.Health concerns, excise tax increases, extensiveregulation and, to some extent, litigation havelimited the growth prospects for the industry, buthave also kept barriers to entry high.
Ford Equity Research rates PM a STRONG BUY in part on earnings strength.
EPS increased from $3.77 to an estimated $4.63 over the past 5 quarters indicating an improving growth rate. Analyst forecasts have recently been raised. Company recently reported better than expected results
The Street rates PM a BUY (A-) primarly based on revenue growth and notable return on equity.
Why I like Dividend Paying Stock, Especially for Tax Sheltered Accounts
Historically dividend paying companies have far outperformed non-dividend paying stocks, and dividends account for about 40% of the total return from owning S&P 500 stocks over the long term. The combination of high dividends plus short-term estimate momentum just could lead to long-term success in the market. This is not a flashy strategy, but a solidly profitable one. It focuses on both sides of total return, income plus capital appreciation. (Credit: Zacks.com)
PM seems valued at a discount with a PEG value of 1.4101, one of the lowest in the Tobacco industry
PM converts an above median percentage of its revenues to profits compared to other companies in the Tobacco industry. Furthermore, the company is profitable with an operating margin of 17.20%.
PM is overall quite efficient in comparison to its peers with a Return on Assets, Return on Equity, and Revenues Per Employee of 23.31%, 203.31%, and $913,243.90 respectively. Despite average performance at generating revenues from employees, the company is among the best at managing their owner’s equity and at managing their resources compared to other companies in the Tobacco industry.
Philip Morris International Inc. (PMI) is a holding company. PMI, through its subsidiaries and affiliates and their licensees, is engaged in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States of America. As of December 31, 2010, its products were sold in approximately 180 countries. Its portfolio comprises both international and local brands, which include Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris and Red & White. PMI also owns a number of local brands, such as Sampoerna A, Dji Sam Soe and Sampoerna Hijau in Indonesia, Fortune, Champion and Hope in the Philippines, Diana in Italy, Optima and Apollo-Soyuz in Russia, Morven Gold in Pakistan, Boston in Colombia, Belmont, Canadian Classics and Number 7 in Canada, Best and Classic in Serbia, f6 in Germany, Delicados in Mexico, Assos in Greece and Petra in the Czech Republic and Slovakia.