Philip Morris: An All Weather Buy
02/17/2016 8:00 am EST
This market has plenty of global investors reaching for a smoke to calm the nerves. It might be ugly for most market sectors, but select consumer staples that have globally recognized products are humming along just fine, suggests income expert Bryan Perry, editor of Cash Machine.
Tobacco giant Philip Morris International (PM) is a stock that can be owned in any economic cycle, but particularly when capital is flowing into recession-proof stocks, Big Mo being one of them.
The company’s portfolio of leading brands includes Marlboro, Parliament, Virginia Slims, Red & White, and a whole host of international brands that target markets in 180 countries around the globe.
The company recently reported fourth-quarter earnings of $0.81 per share, matching analysts' estimates, and 2016 earnings are expected to advance by about 7% to $4.74 per share with revenues rising by 4% to $27.25 billion.
The company pays an annual dividend of $4.08 per share or $1.02 per share per quarter, with a payout ratio of 86.4%.
At its current price of $90 per share, the dividend sports a yield of 4.56% and falls comfortably in the range of those stocks.
I’m positioning in the Safe Haven Portfolio for all weather income and bunker-like preservation of capital.
From a technical standpoint, PM shares put in a golden cross back in October when the 20-day and 50-day moving averages crossed up through the 200-day moving average that established a new and powerful uptrend for the stock.
The past three months have seen the shares in a flag formation range that typically precedes higher highs in the weeks and months ahead. Money flow is very bullish. I recommend purchase of PM under $92.
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