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Philip Morris International, Inc. Message Board

  • axpkocop axpkocop Mar 11, 2009 4:28 PM Flag

    Current Market Cap under $70 billion

    In 10 years the market cap may only double but the price of the stock will quadruple due to PM's share repurchase program.

    The key to PM's success is not the high dividend yield but rather its share repurchase program. That's what made RAI such a successful company years ago when they weren't paying out 75% of their earnings in dividends. For years RAI bought back over 5% of their own shares at depressed prices much like PM today.

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    • Have you looked at RAI's price lately?

    • Check out the P&F charts and don't tell me their obsolete! Simple MA 50&200,you could drive a aircraft carrier between the two! Dividend is all you have with the huge paper loss!I'm sitting on a 20% paper loss and the charts say it could go to $20. When you get rid of the dividend watch that baby dive. The company doesn't care that's more they don't have to pay the shareholder!

    • I have to disagree with you. I understand your premise but it's not fully accurate.

      The key to PM's success is the total return. Strong dividend (main priority) along with Share repurchases creates the total return. If PM did not pay a dividend, the return stated below would be unattainable and the company would have gone private.

      I am a strong advocate of share repurchases over dividends for tax purposes but without dividends I would not be able to invest the proceeds of my equity investments into additional shares or into other investments.

      My thinking on PM is the following, If I can get a 5-6%+ dividend (which will grow substantially) and a solid 5-6%/year capital gain... The potential total return is over 10%. Over the years my potential return will continue to grow as my dividend yield continues to increase.

      "From 1925 through the end of 2003, tobacco company Philip Morris, now called Altria Group, delivered a 17% average annual return, assuming all dividends were reinvested in the company's shares. That beat the average stock by 7.3 percentage points a year. A $1,000 investment in Philip Morris in 1925 would now be worth more than a quarter of a billion dollars."

      ""Dividends matter a lot," Siegel writes. "Reinvesting dividends is the critical factor giving the edge to most winning stocks in the long run ... "

    • You are right but it will trade sideways for sometime to come. I am happy for that. I am itchy to put more money in but have to wait till May. I hope it stays down here through Spring. No reason to rise right now unless you see something that I haven't. Ideas for a rip?

    • I agree.

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