PM

Philip Morris’ Operating Income Growth Stalls in 3Q; Learn About Altria’s Hidden $21.6 Billion Potential Cash Load

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On Thursday, Philip Morris International (PM) reported third-quarter results that showed the continuation of a very challenging cigarette volume environment. Reported net revenues held the line thanks to significant pricing strength, but adjusted ‘operating companies income’ (OCI) still fell 1.9% (shown below). We’re growing skeptical of the firm’s ability to control costs, as there should have been better performance on the operating line given that pricing completely replaced volume losses in the period (price falls straight to the bottom line). Profit margin improvement was surprisingly absent, with the company’s adjusted OCI margin falling 0.9 percentage points from the year-ago period. Image Source: Philip Morris Adjusted diluted earnings per share of $1.44 was 4.3% higher than the same period a year ago, … Read more

Altria Posts Second Quarter Results; Earnings Outlook Raised But Volume Declines Evident

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On Tuesday, Best Ideas portfolio and Dividend Growth portfolio holding Altria (click ticker for report: ) reported solid second-quarter results. Though Altria’s revenue fell nearly 3% (down 1.2% net of excise taxes), the firm was able to drive operating earnings expansion of 6.6% thanks to a combination of strong pricing and cost-cutting initiatives. The cigarette maker’s second quarter adjusted diluted earnings per share advanced 5.1% to $0.62, as all three of the firms’ divisions drove ‘operating companies income’ and margin expansion during the period. Adjusted ‘operating companies income’ at its ‘Smokeable Products’ division nudged higher, but only because cigarette price increases stuck. Its total retail cigarette share grew during the quarter, but industrywide headwinds were massive as the firm’s domestic … Read more

Philip Morris’ Second Quarter Reveals Volume Pressures

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Philip Morris (click ticker for report: ) issued lower-than-expected revenue and earnings in its second quarter Thursday. Net revenues, excluding excise taxes and currency, rose modestly (0.5%) thanks to improvements in ‘Latin America and Canada,’ while operating income, excluding unfavorable currency movements, fell more than 3% (led by more than a 9% slide in operating income in its ‘Asia’ division). Adjusted diluted earnings per share nudged up a penny, to $1.37, and we note that such improvement was augmented by its share repurchase program. Philip Morris’ cigarette shipment volume of 228.9 billion units fell nearly 4%. Though the pace of the volume decline slowed from the first quarter of the year, performance was clearly subdued, and volumes in the ‘Eastern … Read more

Philip Morris Capitalizes on Growth Markets

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International cigarette maker Philip Morris (click ticker for report: ) announced strong fourth quarter results. Revenue, net of excise taxes, grew 2.8% year-over-year to $7.9 billion, falling slightly short of expectations, though that was mainly attributable to currency fluctuations. Adjusted earnings per share increased 13% year-over-year to $1.24, exceeding the consensus estimate by a few cents. On a company-wide level, shipments of cigarettes grew 2.9% year-over-year (excluding acquisitions) during the fourth quarter. Revenue and earnings, when accounting for currency fluctuations, also looked much more favorable, growing 6% and 16%, respectively. Philip Morris also used its strong cash flow generation to repurchase $2 billion of stock, while returning $0.85 per share (per quarter) to investors in the form of dividends. Shipment … Read more

The Valuentum Dividend100 Publication; A Must-Have For Any Income Investor

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Dividend investors literally have thousands of income stocks to choose from. So what are they to do, and where can they go for the most trusted forward-looking opinions on dividend growth and safety? That’s the question we seek to answer with our ValuentumDividend100 publication. In this document, we showcase the top 100 high-quality, dividend growth gems within our coverage universe. Whether you’re looking to build a portfolio consisting of high-yielding, dividend-growers or simply seeking to augment it with a few income gems, the Valuentum Dividend100 is an essential resource for any income investor. We outline some of the key components of our Dividend100 publication below, and explain how you can get the most from each of one Sign Up for … Read more

A Dual Focus on Valuation and Yield Is the Best Way to Combat Changes in Future Dividend Tax Rates

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With a potential hike in the dividend tax rate just around the corner, there is no more important time than now for income investors to evaluate their existing portfolio holdings to determine whether they are well-positioned for a higher-tax environment. Assuming there are no changes to the current trajectory, the top dividend tax rate is expected to rise to 39.6% next year (up from 15% currently), and the highest-income earners will see a Medicare surtax on top of that. Evaluate All Aspects of a Dividend Investment First of all, we think those investing in high-yielders (firms) at any price (HYAAP) may be most affected by this change in tax rates. These high-yielders at any price (HYAAP) tend to be favorites of those at or near retirement, particularly given the paltry payouts on fixed … Read more

Economic Commentary: Bank Earnings, US-China Phase One No Big Deal and More

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Bloomberg recently reported that U.S. banks’ record-breaking earnings have likely peaked for this cycle. We’ll get the team’s thoughts on this, and we’ll also cover views on the corporate credit cycle, China GDP, and the US election cycle. We don’t think the US-China Phase One deal amounts to much, other than removing the uncertainty that it, itself, created. Let’s kick things off with our views on a recent Bloomberg piece, U.S. Banks’ Record-Breaking Earnings Streak Has Probably Peaked, “which notes that “global interest rates remain stubbornly low and geopolitical tensions (remain) high.” Matt Warren is Valuentum’s Independent Bank and Economic contributor, and we’ll start there. Matthew Warren: The views expressed in the article seem a bit overly bearish assuming the … Read more

Dividend Increases/Decreases for the Week September 17

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Below we provide a list of firms that raised their dividends during the week ending September 17. 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 AFC Gamma (AFCG): now $0.43 per share quarterly dividend, was $0.38. AG Mortgage Investment Trust (MITT): now $0.21 per share quarterly dividend, was $0.07. American Financial Group (AFG): now $4.00 per share special dividend, was $2.24. American Tower (AMT): now $1.31 per share quarterly dividend, was $1.27. BIOQUAL (BIOQ): now $1.25 per share annual dividend, was $1.10. BRT Apartments (BRT): now $0.23 per share quarterly dividend, … Read more

Valuentum: Now Bearish, We’ve Been Here Every Step of the Way

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Valuentum Has Been Here Every Step of the Way   From the COVID-19 top in February 2020 to the COVID-19 bottom to the massive bull run through the end of 2021, we’ve been here for you.    2022 started out to be a rough year, catching many by surprise.   But Valuentum stayed positive. When the markets headed south in June, Valuentum stood its ground. On June 14, Valuentum said that “we still believe stocks could make a “huge rebound” in the near term.   We reiterated our views a few days later and on June 19, we said that “investors shouldn’t panic during this bear market” and that “stocks remain an attractive proposition at the moment and a very attractive consideration … Read more