Philip Morris International (NYSE:PM) spun off from Altria in 2008. As the name implies, it operates primarily outside of the U.S., despite the Manhattan address of its headquarters. Among top tobacco stocks, it remains best known for retaining the right to market Marlboro cigarettes outside of the U.S. (Altria holds the U.S. rights).
While it remains a similar company to Altria in many respects, the non-U.S. focus gives it the advantage of not having to deal directly with federal regulation. As a result, it has led the way in IQOS in other countries. Its non-U.S. focus also gives this company an advantage over Altria if it wants to make deals with cannabis companies.
Due to its offshore focus, Phillip Morris International now exceeds the size of its original parent company. It holds a market cap of about $129 billion, slightly larger than Altria's market cap of just under $118 billion. The forward P/E of 16.4 comes in somewhat higher than Altria. However, with its five-year average PE of 20.3, it usually trades at a slight premium to its former parent.
On the dividend front, it lags the long-term history of Altria, but little else. This payout has risen every year since the company's 2008 spinoff. The recent increase takes the annual dividend to the equivalent of $4.56 per share, a yield of over 5.5%.
Despite the accolades, the PM stock price has fallen steadily since achieving a high of $122.90 per share in June 2017. It now trades almost 33% below this level. However, with its generous dividend, I think it presents a buying opportunity. If Phillip Morris International enters the marijuana business, investors can profit from both a high payout and hopefully, a rising stock price.
After the huge drop in April from $101 all the way to May low of $76.05, the price has formed a firm support around $77. PM stock closed Monday at $81.40 pushing through the 50-SMA line of $82.03, the 20-EMA is supporting the PM price at $80.63.
Today trading will be signal for the BULL to position for a close above the 50-SMA line which will definitely see PM push towards the $90 where the 200-SMA will be there to greet it.
The Bear needs a close below the 20-EMA line of $80.63 to see the $77 support be tested.