If you are interested in cashing in on Philip Morris International Inc’s (NYSE:PM) upcoming dividend of $1.07 per share, you only have 3 days left to buy the shares before its ex-dividend date, 21 March 2018, in time for dividends payable on the 11 April 2018. Is this future income a persuasive enough catalyst for investors to think about Philip Morris International as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. View our latest analysis for Philip Morris International
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is it the top 25% annual dividend yield payer?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has dividend per share risen in the past couple of years?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it be able to continue to payout at the current rate in the future?
How well does Philip Morris International fit our criteria?
The current trailing twelve-month payout ratio for PM is 108.78%, which means that the dividend is not well-covered by its earnings. However, going forward, analysts expect PM’s payout to fall into a more sustainable range of 75.09% of its earnings, which leads to a dividend yield of 4.47%. In addition to this, EPS should increase to $5.28, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of PM it has increased its DPS from $1.84 to $4.28 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. Relative to peers, Philip Morris International produces a yield of 4.14%, which is on the low-side for Tobacco stocks.
Considering the dividend attributes we analyzed above, Philip Morris International is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three essential factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for PM’s future growth? Take a look at our free research report of analyst consensus for PM’s outlook.
- Valuation: What is PM worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether PM is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.