No razzle-dazzle in PM, not a great flip opp. Any price under 85 = more than 4% yield on current 85 cents which will be raised to 90 to 92 cents (imo). More than 4% is unusually high for PM.
All sales outside U.S.....actually has some growth markets. Current down price due to bad foreign exchange effect in 2Q...getting partially reversed lately. Unusually low price.
Buy under 85 for decent, safe yield at unusually low price, sell covered calls at 95 when price gets back to 90. You either get 10 profit plus option premium or yield enhanced by option premium. No home run here....just safe, decent profit/yield in a non-reit, dominant company.
Just sold Jan 95 calls covering the lot I bought at 84.56 which prompted the opening post of this thread, netting a hair under a buck..
So, I get (including the call premium) more than 3 dividends in 6 months and I may get called at more than a 10.00 profit. My downside is giving up any price over 95.00, which I'm OK with because I own a bunch of PM which is not for sale.
No home run. Just a safe, enhanced yield, imo. Good enough for me, a yield investor.
More than I expected and not the first time. 94 x 4 = 3.76 / 4% = 94.00 which equals price at which yield is 4%.
Under 94 = more than 4% yield. In at 85 or under = 4.42% yield or better. A price of 100 = 3.76% yield, closer to typical PM.
"3:46 am Philip Morris International increases quarterly div by 10.6% to $0.94 from $0.85 per share "
This is very good news for PM longs. This portends better news than expected for earnings also, because PM management pretty much locks in the dividend at 65% payout ratio I believe. Many were predicting a more modest dividend raise to $0.90, so raising it to $0.94 should bring a welcome earnings surprise.
I had already owned some shares a year or two ago, but I did take advantage of this dip back to the 52-week low to add some more. I think this drop might be because of the currency volatility with some of the countries PM does business in? I'm not sure what kind of currency hedges PM has in place for situations like we see happening now.