This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Philip Morris' Ultra-Safe Dividend

Where is all of this new business coming from? The emerging markets.

In particular, sales to Asia increased nearly 35% in 2011. As economies in developing regions expand, there's a substantial increase in the disposable incomes of their citizens. With a little more money in their wallets, a larger percentage of the population can afford premium international cigarettes.

But of course, we're most interested in the dividend -- and its safety.

Currently, Philip Morris International pays $0.77 per share every quarter. That amounts to $3.08 per share every year, or a 3.7% yield at recent prices.

This might not sound like much to write home about, but here's the kicker -- Philip Morris has raised the dividend 67.4% since 2008.

And the company can afford to keep increasing the dividend. Like I said earlier, PMI has a payout ratio of 55%, indicating plenty of room for future growth, and a near-zero risk of a cut at this time.

So though the shares currently yield 3.7%, investors who buy now are likely to see their yield on cost rise over time.

Now, I know investing in cigarettes may not be for everyone. But as an analyst, it's my job to find investment opportunities. And with a history of steady cash flow, the strongest brand names in the industry, and substantial emerging market growth, Philip Morris International is an ideal safety-first income play.

This doesn't mean this investment is risk-free -- nothing short of a savings account is. In fact, after a sharp move higher, conservative investors are likely to want to wait for a pullback before buying. But I do think the stock ranks high among the safest dividend-payers in the world.

Philip Morris is just one of the many income-paying prospects available from companies focused overseas. In fact, I think the abundance of international income investments is one of the market's best-kept secrets. There are literally thousands of high-yielders abroad.

To prove this, I recently had a member of StreetAuthority's research staff comprise a list of profitable companies with shares yielding 12% or more. What we found was pretty remarkable.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%
YHOO $44.52 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs