2024-04-10 05:17:20 ET
Summary
- Philip Morris International is experiencing strong growth in its smoke-free product segment, particularly in heated tobacco products.
- The company has ambitious growth targets for its tobacco-free products and expects to generate two-thirds of its net revenues from non-traditional products by 2030.
- Philip Morris' non-traditional products have better unit economics, leading to income upside and dividend growth for the company and its shareholders.
Philip Morris International ( PM ) is a well-run tobacco firm that makes continual gains in the smoke-free product segment. Philip Morris is seeing strong growth for its heated tobacco and electronic cigarette products, and the company has laid out ambitious growth targets to expand its tobacco-free product segments to a two-third revenue share by the end of the decade. Since Philip Morris is growing its profits in the smoke-free segment especially fast, a changing portfolio mix could drive significant income upside for the tobacco company and its shareholders. With a 13X P/E ratio and a 6% dividend yield, I believe the risk profile is attractive for dividend and non-dividend investors alike....
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Philip Morris: A Top Income Stock With A 6% Yield