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A plan by Philip Morris (PM +1.1%) to buy back $18B in shares on top of its lush 3.66% yield...

  • Wednesday, June 13, 2012, 2:27 PM ET
    A plan by Philip Morris (PM +1.1%) to buy back $18B in shares on top of its lush 3.66% yield makes it an enticing stock for conservative investors, argues Barron's Dimitra Defotis. Though the stock trades with a forward P-E ratio higher than the multiple on the S&P 500, opportunities in emerging markets and the strength of the brand could justify the premium.
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  •  
    Thats highlights the problems with dividend stocks. These companies trade at higher multiples than many growth stocks. It doesn't really suggest that PM should drop in value, but rather that growth stocks offer a more compelling valuation.
    13 Jun 2012, 02:30 PM Reply Like
  •  
    PM is a growth stock.
    13 Jun 2012, 02:35 PM Reply Like
  •  
    The beauty of Philip Morris over the decades is that it usually traded at a low or reasonable valuation so wjhen u rteinvested the divdend you usually got a good reinvestment. The threesome (KFT,MO,PM) are becoming pricey due to dividend players bidding them up and the aggressive buybacks at higher valuations by PM mgt. Not pleased by mgts aggressive buyback and debt explosion. $6 bil to 18 bil since spin off.
    This is financial engineering not basic unit growth and freecashflow growth. The mgt is in such a rush to goose up the shares by buybacks.
    13 Jun 2012, 10:17 PM Reply Like
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