Summary
With the recent volatility we have seen in markets over the last month, a move to high-yielding names is a defensive strategy that many have employed.
The price action suggests the stock is looking to break above $90. Failure to do so means it will likely be range bound around the $85 mark.
The company is transitioning from a cigarette company to a tobacco products type company.
The increase in heated tobacco products is more than offsetting the decline in traditional tobacco/cigarettes.
The dividend is secure.
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Philip Morris International (NYSE:PM) stock has been under pressure all year, however we have been buyers on the way down. In recent sessions it looks like the stock has begun to find its legs again. Keep in mind the name is a real dividend champion, which has raised its payout once again this year. With the recent volatility we have seen in markets over the last month, a move to high-yielding names is a defensive strategy that many have employed. That said, over the long-term, we stand behind Philip Morris stock. But should you be buying here, or is this bounce short-lived?
To address this question, we turn to the just announced company earnings,which we would like to discuss. The price action suggests the stock is looking to break above $90, however, failure to do so means the stock will likely be range bound around the $85 mark, barring any extenuating market action or news items. That is a positive for a dividend paying name, though our bias is for the stock to move higher, based on the recent chart and fundamentals. From a fundamental standpoint, we will examine performance of traditional tobacco versus heated tobacco products. We are looking for continued higher sales of heated tobacco units while seeing reduced sales of traditional tobacco. Further, we will discuss our expectations moving forward in light of this performance.
