Philip Morris Provides Fifth Consecutive Dividend Hike

Source from:  Tobacco World 10/12/2012

Last week was characterized by a very slow increase in the activity of dividends. However, it was not bad if you were a shareholder of Philip Morris (NYSE: PM), which manufactures and sells cigarettes and other tobacco products. The company raised its quarterly dividend by 10.40% to 85 cents a share. It was the fifth annual dividend increase for this global tobacco conglomerate. Check out my recent analysis of the shares.

The average annual growth of dividends over the past five years was 13.20%. In addition, the company is pursuing an aggressively to buy back shares. The number of shares was reduced from 2.062 billion in 2008 to 1.701 billion in 2012. Back in June 2012, the company announced a three-year program to buy back shares worth $ 18 billion.

Based on expected 2012 earnings of $ 5.18 per share, ahead of dividends ratio is 65%, which is stable. The company also estimated to earn 11% more per share in 2013, which is likely to translate to a quarterly dividend payment of 94 cents per share by the end of 2013.

EPS is expected in 2013, twice that in 2007 EPS of $ 2.87 per share. I find the stock attractively valued at 17.30 times earnings, yielding 3.80% and having a sustainable dividend payout ratio. Because Philip Morris is my biggest position, I probably do not have the opportunity to add to it a few months. However, I like the long-term economics of business PMI, and the prospects for growth of income of about 10% -12% / year for the foreseeable future.

There are several risks that investors represented Philip Morris. The biggest problem involves stringent regulatory environment in most developed countries, PMI operates in. recent introduction of plain packaging for cigarettes sold in Australia is likely to harm competition, and companies such as PMI will have a hard time differentiating their products based on strong brands and quality products.

Fortunately, there are no countries that seem most likely to adopt a similar approach in Australia for at least the next five years or so. Moreover, since the PMI operates in many countries around the world, it is likely that the failure of one country will be more than offset against profits elsewhere.

Atlantic Tele-Network (NASDAQ: ATNI), through its subsidiaries, provides wireless and wireline telecommunications services in North America, Bermuda, and the Caribbean. The company raised its quarterly dividend by 8.70% to 25 cents a share. It was the 14th consecutive year of dividend increase for this dividend achiever. Atlantic Tele-Network looks attractively valued at 18 times earnings, yields 2.50% and has an adequately covered distribution. I like the fact that the company managed to increase revenue and distribution over the last decade. I would like to add the stock to the list for further analysis.

Other companies raising distributions include Kroger (NYSE: KR), which operates retail food and drug stores, multi-stores, jewelry stores, and shops across the United States. The company raised its quarterly dividend by 30.40% to 15 cents a share. It was the seventh consecutive annual dividend increase for the company. Yield: 2.50%.

Kroger has a five-year dividend growth of 17% per year. After a nearly 18-year hiatus, Kroger began paying dividends in 2006. The company has been a consistent dividend raiser until 1988, when he took out a big loan and issued a large dividend to investors in order to fend off potential buyers.

Over the past ten years, Kroger was not able to grow earnings per share, despite more than a quarter to repurchase shares in issue during the period. Without revenue growth, future dividend growth is limited. Enditem