Last time I bought PM was back in 2013, so it has been a while since I added to this position. This year, the company has been battling some recent declines and the share value been taking most of the damage. It has been one of my few full positions that I have been fully maxed out within my diversification spectrum. But currently, it looks too good of a buying opportunity to miss.
Philip Morris International Inc. (PM) was found in 1900 and is a global cigarette and tobacco company. It holds a highly diversified portfolio of cigarette and tobacco brands. It owns 6 of the top 15 international brands around the world. Though, it is primarily led by the Marlboro brand, which is the best selling cigarette brand in the world. It sells its products in over 200 countries.
- Dividend Yield: 5.1%
- 3Yr Divided Growth Rate: 12.4%
- 5Yr Dividend Growth Rate: 12.2%
- Payout Ratio: 94.6%
- P/E: 16.3
- Consecutive Years of Dividend Raises: 7
I purchased 13 shares for the price of $76.30 adding $52.00 to my annual income.
This is the third time I am initiating an acquisition this year. Also, this recent transaction makes it the fourth time I am adding to PM ownership. Brick by brick baby! Currently it represents to be around 6.8% of my current portfolio. A little bit higher than I would want it to be, but I’ll continue on building other stakes to decrease the weight in the portfolio. Like I mentioned before, for me personally, the sweet spot is no more than 5% for biggest company holding. Obviously the weight fluctuates a little bit due to volatility, so it will never be perfect 5% at all times.
A possible concern is the payout ratio being much more higher than I would like to. I think PM will have to take some action on this with smaller dividend raise in the future or possibly worst case scenario of cutting the dividend. Hopefully, that worst doesn’t come, but I think cigarettes and tobacco are still going to be around for a while.
The 12-month dividend income increased to $2,336.
Thank you for reading & have a great day!