Since the S&P 500 hit yet another record high to close out trading last week, it is becoming more difficult to find high-quality stocks that are trading at reasonable valuations.
As I've
Philip Morris International Remains A Fair Buy At $90/Share
Summary
- Philip Morris International's adjusted diluted EPS (excluding currency) and FCF payout ratios of 85.8% and 80.0% in 2020 suggest that the dividend remains reasonably safe going forward.
- Despite a 1.6% YoY decline in net organic revenues in 2020, Philip Morris International posted a 7.0% YoY increase in adjusted diluted EPS (excluding currency) during that time.
- Philip Morris International's interest coverage ratio advanced from ~17.3 in 2019 to ~17.7 in 2020, and boasts A2, A, and A credit ratings from Moody's, S&P, and Fitch.
- Adding to the case for an investment in Philip Morris International is the fact that the stock is trading at a 8% discount to fair value based on my inputs into the DCF model and DDM.
- Between its 5.3% yield, 5.0-6.0% annual earnings growth, and 0.8% annual valuation multiple expansion, shares of Philip Morris International are primed to meet my 10% annual total return requirement over the next decade.
Hi, my name is Kody. Aside from my articles here on Seeking Alpha, I am also a regular contributor to Sure Dividend, The Dividend Kings, and iREIT+Hoya Capital. I have been investing since September 2017 (age 20) and interested in dividend investing since about 2009.Since July 2018, I have ran Kody's Dividends. This is a blog that is documenting my journey towards financial independence using dividend growth investing as the means to transform the dream of financial independence into a reality. It's also the inspiration of my pseudonym here on Seeking Alpha.By God's grace, I owe everything to my blog for introducing me to the Seeking Alpha community as an analyst. That's my story and I hope you enjoy my work examining dividend growth stocks and the occasional growth stock!
Analyst’s Disclosure:I am/we are long PM, MO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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