2024-03-15 09:00:00 ET
Summary
- Philip Morris International has trailed the market but offers an opportunity for income-focused investors in a lower interest rate environment.
- There are risks to investing in PM, including negative stigma, regulatory challenges, and a cultural shift away from smoking.
- PM's financials contradict the contraction narrative, with revenue and forward projections showing growth potential in the smoke-free future.
It certainly feels like we're back in a risk-on environment. The CPI print came in at 3.2% on 3/12, which was above the consensus estimate of 3.1%, yet the market didn't sell off. The 30-year fixed rate mortgage fell below 7% to 6.84%, and all eyes are shifting to Fed Chair Powell's commentary on 3/20 after the FOMC releases its interest rate decision and economic projections. We're inching closer to a rate-cutting environment, and even though the risk-on environment could control the narrative, I think there is an opportunity for quality income-producing assets. Philip Morris International ( PM ) hasn't done much over the past several years as shares are up 6.5% from where they were five years ago, but I think that could change. I think that the combination of more individuals retiring and a lower interest rate environment will make income-focused ETFs and companies like PM more popular. PM has increased the dividend for 16 consecutive years, yields 5.49%, and is still growing despite a narrative about the tobacco industry contracting. I am bullish on PM and feel that it can deliver future dividend increases and capital appreciation for investors....
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Philip Morris: Growth Isn't Finished For The Forward EPS Or 5.49% Dividend Yield