Philip Morris Has 4% Yield

By Douglas A. McIntyre Published Oct 28, 6:20AM EDT

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Philip Morris International Inc. (NYSE: PM | PM Price Prediction) stock has outperformed the S&P 500 this year and offers a safe dividend.
The company has succeeded in diversifying beyond cigarettes.
Also: Dividend legends to hold forever.

Philip Morris International Inc. (NYSE: PM) makes products that will never go away, at least entirely. These are cigarettes and smoke-free tobacco. The market has rewarded it. Philip Morris shares are up almost 40% this year, compared to the S&P 500 gain of 23%. It also has a 4% yield, which is safe because of the company’s iron-clad balance sheet.

In the most recently reported quarter, revenue rose 11.6% to $9.9 billion, and third-quarter diluted earnings rose 42.9% to $1.91 per share. The company also lifted its guidance for the full year. CEO Jacek Olczak commented, “In the third quarter, we delivered exceptionally strong performance, with record quarterly net revenues and earnings per share.”

Philip Morris succeeded in diversifying beyond cigarettes. About 38% of its sales come from smoke-free tobacco, which it sells in 92 markets worldwide. It sold 198 billion of its cigarettes and smoke-free product units worldwide.

The company also raised its dividend by 3.8% to $1.35 per share. Philip Morris will have about $11 billion in cash flow this year, and its dividend is likely to keep increasing.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.