PM

Philip Morris Remains a Free Cash Flow Cow

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Image Source: TradingView By Brian Nelson, CFA On April 22, Philip Morris (PM) reported better than expected first quarter results that beat the consensus top- and bottom-line estimates. Net revenues increased 9.1% (2.7% organically), to $10.1 billion, with both its smoke-free and combustibles businesses contributing to the top line advance. Smoke-free revenue was up 12.4% (5.2% organically), while combustibles revenue was up 6.7% (0.9% organically). Philip Morris’ smoke-free business now accounts for 43% of total net revenues. Management had the following to say about the results: Our performance exceeded our expectations in the first quarter, with an outstanding delivery from IQOS driving very good growth for the group against a strong prior-year comparison. Building on excellent broad-based momentum in the … Read more

Philip Morris’ Growth Targets Are Solid

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Image Source: TradingView By Brian Nelson, CFA Philip Morris (PM) recently reported fourth quarter results that were mixed with revenue missing the consensus forecast, but non-GAAP earnings per share coming in-line with estimates. In the fourth quarter, net revenues increased 6.8% led by a 12% increase in its smoke-free business. Organic growth was 3.7%. Gross profit advanced 5.1% on an organic basis, while operating income increased 4.5% on an organic basis. In the quarter, adjusted diluted earnings per share, excluding currency, came in at $1.69, up 9% year-over-year. For the full year 2025, its smoke-free business accounted for 41.5% of its total net revenues and nearly 43% of total gross profit.   Management had the following to say about the … Read more

Thinking Slow: 3 Research Blind Spots That Changed the Investment World

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Dear members: — Daniel Kahneman in his text Thinking, Fast and Slow (1) divided the human psyche into two systems. The first system is instinctive and emotional, often set on autopilot, while the second system is slower and more logical, requiring a calculating conscious. Many of the maxims the investment world takes for granted today suffer from conclusions that are made rapidly, almost without thinking, driven by our first system, creating what I call research blind spots. — In World War II, Allied bombing raids were suffering from very high casualty rates. It was estimated that for those pilots that were flying at the beginning of the war, only about 10% survived, a terrible loss rate. Bombing was crucial to the Allied … Read more

Philip Morris’ Smoke-Free Portfolio Continues to Outperform

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Image Source: Philip Morris By Brian Nelson, CFA On October 21, Philip Morris (PM) reported better than expected third quarter results with both revenue and non-GAAP earnings per share exceeding the consensus forecasts. Third quarter net revenues increased 5.9% on an organic basis, reflecting higher combustible tobacco pricing and favorable volume/mix driven by higher smoke-free products volume, offset in part by lower volumes and unfavorable mix for cigarettes. Philip Morris’ shipment volume increased 0.7% with smoke-free product (SFP) volumes up 16.6%, with all SFP categories growing strongly. Cigarette volumes declined 3.2%, with weakness in all regions. Adjusted operating income increased 7.5% on an organic basis. Adjusted diluted earnings per share grew 17.3%, to $2.24, and by 13.1% excluding currency. Management … Read more

Dividend Increases/Decreases for the Week of September 19

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Below we provide a list of firms that raised their dividends during the week ending September 19. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week                          Adamas Trust (ADAM): now $0.23 per share quarterly dividend, was $0.20. Apartment Investment (AIV): now $2.23 per share special dividend, was $0.60. Banco Macro (BMA): now $0.3665 per share quarterly dividend, was $0.3658. CareRx (CRRX:CA): now CAD 0.02 per share quarterly dividend. Cherry Hill Mortgage Investment Corporation 8.250 CUM PFD B (CHMI.PR.B): now $0.6523 per share quarterly dividend, was $0.6413. Cross Timbers Royalty Trust … Read more

Philip Morris’ Smoke-Free Portfolio Continues to Gain Traction

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Image Source: TradingView By Brian Nelson, CFA Philip Morris (PM) reported mixed second quarter results July 22, with revenue coming in slightly below expectations, but non-GAAP earnings per share exceeding the consensus forecast. Net revenues increased 7.1% on a reported basis and 6.8% on an organic basis. Its smoke-free business experienced a 15.2% increase in revenue, with 14.5% of that organic. Its combustible portfolio showed a 2.1% increase in revenue, with 2% of that organic. Operating income increased 7.8% on a reported basis in the quarter, while it expanded 14.9% on an organic basis versus the second quarter of 2024. Adjusted diluted earnings per share, excluding currency, increased 18.9% in the quarter. Management had the following to say about the … Read more

3 Undervalued Stocks to Consider Buying Now

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Dear readers:   With the markets retracing most of their recent drawdown, we’re taking a victory lap as we didn’t panic, nor should have you. We highlighted our wait-and-see approach amidst the worst of the pullback, and we expect the Magnificent 7 (large cap growth and big cap tech) to continue to propel the markets higher, as they have done.   We’ve been busy rolling valuation models as we finetune our assumptions for a great number of companies under coverage. While doing so, we came across three undervalued stocks that are also included in the simulated newsletter portfolios. We think they’re prime for highlight.   The three stocks are UnitedHealth Group (UNH), Nvidia (NVDA) and Alphabet (GOOG). We spend a lot of time on discounted cash-flow valuation, … Read more

Magnificent 7 Earnings Reports Not Bad Thus Far

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By Brian Nelson, CFA   Shortly after Trump’s Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500 (SPY), for example, is down just 3.3% year-to-date, excluding dividends.   A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if … Read more

Philip Morris Hits Record High!

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Image Source: TradingView By Brian Nelson, CFA On April 23, Philip Morris (PM) reported excellent first quarter results with revenue and non-GAAP earnings per share coming in higher than the consensus forecasts. Total net revenues advanced to $9.3 billion, which was up 5.8% on a reported basis and 10.2% on an organic basis. Gross profit increased to $6.3 billion, up 11.8% on a reported basis and 16% on an organic basis. Operating income increased to $3.5 billion, up 16.4% on a reported basis and 16% organically. Adjusted diluted earnings per share increased 12.7%, to $1.69, in the quarter. Management was optimistic in the earnings report: We achieved exceptionally strong performance in the first quarter, with continued volume growth supporting an … Read more

Trump Tariffs Higher than Expected; What We’re Doing

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By Brian Nelson, CFA The Trump tariff increases came in larger than what we were expecting, and it remains to be seen how they will flow through the global economy, as we monitor potential retaliatory tariffs from other countries. As it relates to the equity markets, we’re taking a wait and see approach at the moment as we monitor new policy changes related to trade, immigration, fiscal (tax), and regulations. In short, we’re not overreacting to the sell off as we won’t have a great handle on the tariff impact to companies for a few quarters when they report results post-tariff increases. That said, we’re expecting continued market volatility, with meaningful risk to the downside, before trade uncertainty alleviates in … Read more