Philip Morris (PM) Rewards Investors With Dividend Hike
Philip Morris International Inc. PM is focused on enhancing shareholders’ returns. The leading international tobacco company hiked its regular quarterly dividend by 2.4%. This takes the annualized rate to $5.20 per share.
The company will pay a quarterly dividend of $1.30 per share, up from the previous rate of $1.27 per share. The hiked dividend will be payable on Oct 12, 2023, to shareholders of record as of Sep 27.
Philip Morris currently has a dividend payout of 86%, a dividend yield of 5.4% and a free cash flow yield of 5%. With an annual free cash flow return on investment of 18.7%, the increased dividend is likely to be sustainable. Dividend payouts are one of the biggest enticements for investors and Philip Morris is committed to boosting shareholders’ value.
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What Else Should You Know?
Philip Morris has been benefiting from its strong pricing power, which has aided its revenues and adjusted operating income even in the face of the unfavorable tax environment and declining cigarette volumes. Though higher pricing might lead to a possible decline in cigarette consumption, it is seen that smokers tend to absorb price increases owing to the addictive quality of cigarettes. Higher pricing variance was an upside to the company’s performance (mainly due to increased combustible tobacco pricing) in the second quarter of 2023.
Serious health hazards due to cigarette smoking have pushed consumers toward low-risk, reduced risk products (RRPs). The company is progressing well with its business transformation, with smoke-free products generating 35.4% of the company’s net revenues in the second quarter of 2023. The company is well placed to become a majority smoke-free company by 2025. Toward this end, the company’s IQOS, a heat-not-burn device, counts as one of the leading RRPs in the industry.
Shares of this Zacks Rank #3 (Hold) company have inched up 1.3% in the past year against the industry’s decline of 0.6%.
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Philip Morris International Inc. (PM) : Free Stock Analysis Report
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MGP Ingredients, Inc. (MGPI) : Free Stock Analysis Report
