RLX

Philip Morris’ Cash-Flow Dividend Coverage Resilient, ZYN Performance Impressive

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By Brian Nelson, CFA On July 20, Philip Morris (PM) reported strong second-quarter 2023 results that showed 14.5% reported revenue growth and a non-GAAP earnings per share beat of $0.12. Adjusted operating income faced headwinds from global inflationary pressures, but still advanced 6.9% in the quarter. Adjusted diluted (currency-neutral) earnings per share growth came in at 16.9% in the period. For the full year, Philip Morris is targeting organic sales expansion of 7.5%-8.5% and adjusted diluted earnings per share in the range of $6.13-$6.22 per share on the year, reflecting a high-single-digit pace of expansion and a modest increase from prior expectations. Cigarette makers continue to transition to a smoke-free world, and Philip Morris is walking the line between combustible … Read more

Philip Morris’ First-Quarter 2023 Results Just Okay

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By Brian Nelson, CFA On April 20, Philip Morris International Inc. (PM) reported first-quarter 2023 results that were about in-line with expectations. On a pro forma basis, including Swedish Match, the company’s adjusted net revenue growth came in at 3.8%, excluding currency movements, thanks largely to smoke-free product sales expansion and strong pricing growth across its legacy combustible tobacco business. We’re not making any changes to our $105 per-share fair value estimate as a result of the quarterly performance. The cigarette maker noted that it continues to integrate Swedish Match successfully and that it continues to make progress toward its smoke-free goals. Smoke-free revenue was up 3.4 percentage points of total revenue on a year-over-year basis in the first quarter … Read more

Phillip Morris’ Acquisition of Swedish Match Accelerates Smoke-Free Push

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Image Source: Phillip Morris By Brian Nelson, CFA On February 9, Phillip Morris (PM) reported fourth-quarter 2022 results. The company’s performance continues to be impacted by the War in Ukraine. Net revenue growth came in at 0.6% for the quarter, while operating income fell 0.8%. However, excluding sales in Russia and Ukraine, net revenue growth advanced 7.9% in the quarter, while operating income growth advanced 10.3%, a much better showing on an adjusted basis. Smoke-free products accounted for ~36.0% of total net revenue in the period. Here’s what Phillip Morris’ CEO Jacek Olczak had to say about the quarterly results:  Despite the challenging operating environment in 2022, due to the war in Ukraine, as well as supply-chain and global inflationary … Read more

Chinese Stocks Bludgeoned!

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Image: Large cap Chinese equities are now back to levels first reached more than 15 years ago on a price-only basis, to levels first attained in early 2006. By Brian Nelson, CFA Successful investing is as much about selecting big winners such as Exxon Mobil (XOM) and Chevron (CVX) as it is about avoiding big losers – and wow have Chinese stocks been bludgeoned! The iShares China Large-Cap ETF (FXI) traded down nearly 10% on October 24, 2022, putting its 5-year declines at a whopping 50%+, on a price-only basis. The FXI is now back to levels, on a price-only basis, first reached at the beginning of 2006, more than 15 years ago. We don’t include any Chinese ADRs in … Read more

Philip Morris Is One of Our Favorite High-Yielding Income Generation Ideas

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Image Shown: Philip Morris International Inc expects alternative nicotine products will grow at a robust pace over the coming years, with an eye towards heated tobacco units and oral nicotine products. By capitalizing on those opportunities, the company aims to diversify its revenues away from traditional cigarette sales. Image Source: Philip Morris International Inc – 2021 Investor Day Event Presentation By Callum Turcan The tobacco company behind international sales of the Marlboro cigarette brand and the IQOS heated tobacco offering, Philip Morris International Inc (PM), is one of our favorite high-yielding income generation ideas. Philip Morris is a stellar cash flow generator with ample pricing power, and management has laid out a sound strategy for how the firm intends to … Read more

Valuentum: Outlook for Europe, China Is Bleak

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Video: Valuentum’s Associate Director of Research and Co-Portfolio Manager of the simulated newsletter portfolios, Callum Turcan, shares his thoughts about the global economy. Europe is facing considerable pressure from energy prices, while China may face a mortgage meltdown. Join Valuentum for this brief 6 minute video to get up to speed on the goings-on of the global economy and what troubles may be lurking ahead. –——— Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information … Read more

High Yielding Philip Morris International’s Growth Runway Remains Intact

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Image Shown: Shares of Philip Morris International moved higher in the wake of its second quarter earnings report. By Callum Turcan Philip Morris International Inc (PM) reported second quarter 2022 earnings that beat both consensus top- and bottom-line estimates. The company raised its full-year revenue and adjusted EPS guidance for 2022 on a pro forma basis (excluding its operations in Russia and Ukraine) versus previous estimates in conjunction with its latest earnings update. Now Philip Morris International expects to generate 6%-8% net revenue growth on an organic basis and 10%-12% diluted EPS growth in 2022 versus 2021 levels (these are non-GAAP metrics). We include Philip Morris International in the High Yield Dividend Newsletter portfolio as we are big fans of … Read more

High-Yielding Philip Morris Adeptly Navigating Exogenous Shocks

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Image Shown: In the face of major exogenous shocks, Philip Morris International Inc was still able to put up solid operational and financial performance in the first quarter of 2022. Image Source: Philip Morris International Inc – First Quarter of 2022 IR Earnings Presentation By Callum Turcan There are a lot of reasons to like Philip Morris International Inc (PM) as a high-yielding income growth opportunity. Its portfolio includes numerous top selling cigarette brands including Marlboro, L&M, Chesterfield, Parliament, and others. After splitting with Altria Group Inc (MO) back in 2008, Philip Morris has the right to sell these cigarette brands in international markets while Altria Group has the right to sell these branded tobacco products in the US market. … Read more

Philip Morris International Boosts Dividend, Cost Structure Improving

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Image Shown: An overview of Philip Morris International Inc’s guidance for 2021. Image Source: Philip Morris International Inc – Third Quarter of 2021 IR Earnings Presentation By Callum Turcan On October 19, Philip Morris International Inc (PM) reported third quarter 2021 earnings that beat both consensus top- and bottom-line estimates. The firm narrowed its reported diluted EPS estimate for 2021 in conjunction with the report, which saw the midpoint of its guidance move marginally lower. However, Philip Morris International’s non-GAAP currency-neutral adjusted diluted EPS forecast for 2021 now calls for 13%-14% growth over 2020 levels, which is an improvement from its previous guidance calling for 12%-14% growth. In the graphic at the top of this article, Philip Morris International provides … Read more

Update on High-Yielding Philip Morris

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Image Shown: Shares of Philip Morris International Inc have performed quite well over the past year. By Callum Turcan One of our favorite high-yielding plays is Philip Morris International Inc (PM)—5.0% yield—the tobacco giant behind the Marlboro cigarette brand (excluding the US market) and the incredibly popular IQOS product, a heated tobacco unit (‘HTU’) offering . Shares of PM are included as in idea in the High Yield Dividend Newsletter portfolio (more on that here) and as of this writing, Philip Morris’ stock price is up 23% year-to-date before taking dividend considerations into account. The top end of our fair value estimate range sits at $119 per share of Philip Morris, indicating there is ample room for shares of PM … Read more