Wednesday, March 1, 2017

Recent buy: PM

I added 31 shares of Philip Morris (PM) today. That is around $3379 invested which adds $128 annually in dividend income. I am investing in PM based on my belief in the success of the new iQOS and HeatSticks Marlboro brand which is in line with the upcoming generation's focus towards healthier alternatives. People who smoke want to still smoke, but they don't want the tar and chemicals associated with burning tobacco. iQOS provides the satisfaction of nicotine delivery from traditional smoking without the harmful effects associated with burning. If people can have a healthier alternative, smokers will be more likely to continue smoking.

PM has also absorbed most of the shock from the increase in the dollar from 2014-2016. PM compared to MO is supposed to be the higher growth company with the lower yield. Right now PM still yields higher than MO and I believe in the future, as the dollar strength becomes overshadowed by the continuous growth in PM's earnings, that PM will have a lower yield than MO.

MO and PM are getting expensive so I will likely no longer be adding more after these two buys unless earnings and dividend increases are high. Any Trump policies enacted to improve corporate taxes and repatriation of foreign cash will help MO and PM (PM being the one that has international operations). I am feeling that some changes will happen in regards to corporate taxes or repatriation before the end of this year, which will help American businesses.

For additional invest-able cash coming in a week and a half, I am considering Realty Income (O) with a 4.18% yield in my 401k and General Mills (GIS) yielding 3.15% in my taxable account.



  1. A solid buy but it's getting tough to like PM a these levels. Just less than three months ago this stock was in the high $80s. Climbing a little too fast for my take but I still like it. I'm holding on to my PM for the foreseeable future. Thanks for sharing.

  2. Hello Y/D

    Quick question.

    I've been buying a lot of MO over the last several months (I also have PM). I really like both stocks.

    I'm heavily weighted in MO.

    Not too long back I bought some shares of MO when it was around $76.00. Right after that the price went down.

    Now that it's down I bought a little more shares at $71.69.

    Is this a good price to buy at or do you think it could fall even further down this year?

    Just curious what your thoughts are on when to buy and a good price for MO


  3. My time horizon is 30 years or more so anytime is a good time to buy MO for me since in 30 years I'm sure the stock will be many times higher than where it is now, and I'm not going to spend too much of my time thinking if $68 or $70 or $73 is a better price. I like MO below $70. I would hold MO forever and reinvest the dividends and not worry what the share price is doing, collecting the dividend checks is what's important after you click Buy.

    Since I have too much MO, I would likely not be adding more for myself. I will prefer to add to PM if I want exposure to tobacco but I am waiting for it to pull back. MO has retreated but PM is still strong.

  4. Thanks! I appreciate it.