Phillip Morris International Continues to Reward Investors

Source from:  The Spokesman-Review 02/16/2015

If you're a long-term investor looking for an appealingly priced dividend-income stock and you're willing to invest in a tobacco company, give Philip Morris International (NYSE: PM) a look.

Within the United States, the tobacco industry is facing some tough challenges. Efforts to educate the public about the dangers of smoking tobacco coupled with strict regulations governing the industry have pushed cigarette prices higher and adult smoking to an all-time low.

According to the Centers for Disease Control and Prevention, just 17.8 percent of adults in the U.S. (42.1 million) are now smokers, compared to 42 percent of the adult population five decades ago. Furthermore, heavy smokers are smoking less. The end result has been a steady decline in cigarette volumes for many tobacco producers.

Enter Philip Morris International, with its strong Marlboro brand, operating in more than 100 countries outside the United States. While it does encounter some countries with even stricter tobacco legislation than the U.S., it also can counteract these slow-growth regions with high-population countries such as India and China, where a growing middle class seeking simple luxuries has turned to tobacco.

Even if Philip Morris International's business grows slowly in coming years, with its recent price-to-earnings (P/E) ratio near 16 and a fat dividend yield recently at 4.8 percent, it's still a worthy contender for income-seeking investors. Enditem