Shares of Philip Morris International Inc (NYSE:PM) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $1.07 per share, investors must have owned the shares prior to 20 December 2017, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Should you diversify into Philip Morris International and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for Philip Morris International
5 checks you should do on a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is its annual yield among the top 25% of dividend payers?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has dividend per share amount increased over the past?
- Is it able to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
How does Philip Morris International fare?
The company currently pays out 92.41% of its earnings as a dividend, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a more sensible payout ratio of 72.12%, leading to a dividend yield of 4.05%. Moreover, EPS should increase to $5.18, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. PM 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. Compared to its peers, Philip Morris International generates a yield of 3.90%, which is high for tobacco stocks.
What this means for you:
Are you a shareholder? Investors of Philip Morris International can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, Philip Morris International is one worth keeping around in your income portfolio. But, depending on your current portfolio, it may be valuable exploring other income stocks to increase diversification, or even look at high-growth stocks to supplement your steady income stocks. I suggest continuing your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? With this in mind, I definitely rank Philip Morris International as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. As with all investments, 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. Whether or not you like the stock as a dividend play, it’s still worth checking the price tag. Can you buy Philip Morris International for a great price? Dig deeper in our latest free analysis to find out!
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.