Summary

Philip Morris is negatively impacted by currency rate headwinds.

The company produces solid underlying revenue and earnings growth.

It is likely that Philip Morris will produce ample total returns going forward, with much of that derived through the 5.2%-yielding dividend.

Thesis

Through earnings growth and a high dividend yield Philip Morris (PM) has a good chance of delivering double-digit total returns over the coming years. The valuation is not overly high right here, and thanks to iQOS Philip Morris has a solid long-term growth outlook.

Currency rates are a headwind right now, but that will not be the case forever. Once the dollar stops strengthening Philip Morris' underlying earnings power will be visible, and reported results should improve considerably.