NYSE:PM

Stock Analysis Report

Executive Summary

Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes, other nicotine-containing products, and smoke-free products and related electronic devices and accessories.

Rewards

Trading at 39.2% below its fair value

Earnings are forecast to grow 8.34% per year

Earnings grew by 11.7% over the past year

Pays a high and reliable dividend of 5.34%

Risk Analysis

Has a high level of debt

Dividend of 5.34% is not well covered by earnings



Snowflake Analysis

Established dividend payer with proven track record.


Similar Companies

Share Price & News

How has Philip Morris International's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.4%

PM

1.5%

US Tobacco

2.0%

US Market


1 Year Return

20.2%

PM

5.1%

US Tobacco

23.6%

US Market

Return vs Industry: PM exceeded the US Tobacco industry which returned 5.7% over the past year.

Return vs Market: PM underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

PMIndustryMarket
7 Day1.4%1.5%2.0%
30 Day4.0%0.5%3.9%
90 Day8.4%14.8%12.0%
1 Year27.3%20.2%12.1%5.1%26.2%23.6%
3 Year8.8%-6.2%-14.7%-26.8%53.2%43.3%
5 Year36.2%7.1%19.0%-5.4%75.7%56.3%

Price Volatility Vs. Market

How volatile is Philip Morris International's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Philip Morris International undervalued compared to its fair value and its price relative to the market?

38.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PM ($87.58) is trading below our estimate of fair value ($143.93)

Significantly Below Fair Value: PM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PM is poor value based on its PE Ratio (18.3x) compared to the Tobacco industry average (15.5x).

PE vs Market: PM is good value based on its PE Ratio (18.3x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: PM is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: PM has negative assets, so we can't compare its PB Ratio to the US Tobacco industry average.


Next Steps

Future Growth

How is Philip Morris International forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

8.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PM's forecast earnings growth (8.3% per year) is above the savings rate (1.7%).

Earnings vs Market: PM's earnings (8.3% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: PM's earnings are forecast to grow, but not significantly.

Revenue vs Market: PM's revenue (4% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: PM's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if PM's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Philip Morris International performed over the past 5 years?

-0.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PM has high quality earnings.

Growing Profit Margin: PM's current net profit margins (25.2%) are higher than last year (22%).


Past Earnings Growth Analysis

Earnings Trend: PM's earnings have declined by -0.2% per year over the past 5 years.

Accelerating Growth: PM's earnings growth over the past year (11.7%) exceeds its 5-year average (-0.2% per year).

Earnings vs Industry: PM earnings growth over the past year (11.7%) exceeded the Tobacco industry -1.7%.


Return on Equity

High ROE: PM's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Philip Morris International's financial position?


Financial Position Analysis

Short Term Liabilities: PM has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: PM has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: PM has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: PM's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: PM's debt is well covered by operating cash flow (28.9%).

Interest Coverage: PM's interest payments on its debt are well covered by EBIT (20.1x coverage).


Balance Sheet

Inventory Level: PM has a high level of physical assets or inventory.

Debt Coverage by Assets: PM has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is Philip Morris International's current dividend yield, its reliability and sustainability?

5.28%

Current Dividend Yield


Dividend Yield vs Market

company5.3%marketbottom25%1.4%markettop25%3.7%industryaverage5.8%forecastin3Years5.7%

Current dividend yield vs market & industry

Notable Dividend: PM's dividend (5.34%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: PM's dividend (5.34%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: PM's dividends per share have been stable in the past 10 years.

Growing Dividend: PM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (95.7%), PM's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PM's dividends in 3 years are forecast to be covered by earnings (82.4% payout ratio).


Next Steps

Management

What is the CEO of Philip Morris International's salary, the management and board of directors tenure and is there insider trading?

2.0yrs

Average management tenure


CEO

André Calantzopoulos (61yo)

6.7yrs

Tenure

US$15,934,235

Compensation

Mr. André Calantzopoulos has been the Chief Executive Officer of Philip Morris International Inc. since May 8, 2013. Mr. Calantzopoulos served as the Chief Operating Officer of Philip Morris International, ...


CEO Compensation Analysis

Compensation vs Market: André's total compensation ($USD15.93M) is above average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: André's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.0yrs

Average Tenure

54.5yo

Average Age

Experienced Management: PM's management team is considered experienced (2 years average tenure).


Board Age and Tenure

6.7yrs

Average Tenure

65yo

Average Age

Experienced Board: PM's board of directors are considered experienced (6.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$895,78807 Jan 20
Werner Barth
EntityIndividual
Shares11,000
Max PriceUS$81.44
SellUS$96,16225 Jul 19
Mario Masseroli
EntityIndividual
Shares1,100
Max PriceUS$87.42
BuyUS$79,65531 May 19
Michael Kunst
EntityIndividual
Shares1,000
Max PriceUS$80.74
BuyUS$211,67530 Apr 19
Michael Kunst
EntityIndividual
Shares2,500
Max PriceUS$84.67
SellUS$5,848,10126 Apr 19
Louis Camilleri
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares70,000
Max PriceUS$83.54
SellUS$101,18524 Apr 19
Mario Masseroli
EntityIndividual
Shares1,200
Max PriceUS$84.32
SellUS$4,237,75022 Feb 19
André Calantzopoulos
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares50,000
Max PriceUS$84.76

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • André Calantzopoulos (61yo)

    CEO & Director

    • Tenure: 6.7yrs
    • Compensation: US$15.93m
  • Marc Firestone (60yo)

    President of External Affairs & General Counsel

    • Tenure: 7.6yrs
    • Compensation: US$6.23m
  • Martin King (55yo)

    Chief Financial Officer

    • Tenure: 2yrs
    • Compensation: US$3.86m
  • Mirek Zielinski (58yo)

    Chief New Ventures Officer

    • Tenure: 2yrs
    • Compensation: US$5.34m
  • Jacek Olczak (54yo)

    Chief Operating Officer

    • Tenure: 2yrs
    • Compensation: US$6.07m
  • Nicholas Rolli

    Vice President of Investor Relations and Financial Communications

    • Patrick Brunel (54yo)

      Chief Information Officer

      • Frank De Rooij (53yo)

        Vice President of Treasury & Corporate Finance

        • Manuel Peitsch

          Chief Science Officer

          • Michael Voegele (46yo)

            Chief Technology Officer

            • Tenure: 0.9yrs

          Board Members

          • Louis Camilleri (64yo)

            Non-Executive Chairman

            • Tenure: 5.1yrs
            • Compensation: US$700.00k
          • Stephen Wolf (78yo)

            Independent Director

            • Tenure: 12yrs
            • Compensation: US$300.00k
          • Lucio Noto (80yo)

            Independent Presiding Director

            • Compensation: US$325.00k
          • Jun Makihara (61yo)

            Independent Director

            • Tenure: 5.3yrs
            • Compensation: US$335.00k
          • Kalpana Morparia (70yo)

            Independent Director

            • Tenure: 8.1yrs
            • Compensation: US$335.00k
          • André Calantzopoulos (61yo)

            CEO & Director

            • Tenure: 6.7yrs
            • Compensation: US$15.93m
          • Werner Geissler (66yo)

            Independent Director

            • Tenure: 5yrs
            • Compensation: US$335.00k
          • Robert Polet (64yo)

            Independent Director

            • Tenure: 8.3yrs
            • Compensation: US$300.00k
          • Frederik Paulsen (68yo)

            Independent Director

            • Tenure: 5.3yrs
          • Jennifer Li (51yo)

            Independent Director

            • Tenure: 9.7yrs
            • Compensation: US$335.00k

          Company Information

          Philip Morris International Inc.'s company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Philip Morris International Inc.
          • Ticker: PM
          • Exchange: NYSE
          • Founded: 1987
          • Industry: Tobacco
          • Sector: Food, Beverage & Tobacco
          • Market Cap: US$137.991b
          • Shares outstanding: 1.56b
          • Website: https://www.pmi.com

          Number of Employees


          Location

          • Philip Morris International Inc.
          • 120 Park Avenue
          • New York
          • New York
          • 10017
          • United States

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          4I1DB (Deutsche Boerse AG)YesCommon SharesDEEURMar 2008
          PMISWX (SIX Swiss Exchange)YesCommon SharesCHCHFMar 2008
          PMNYSE (New York Stock Exchange)YesCommon SharesUSUSDMar 2008
          4I1XTRA (XETRA Trading Platform)YesCommon SharesDEEURMar 2008
          0M8VLSE (London Stock Exchange)YesCommon SharesGBUSDMar 2008
          PMIZBATS-CHIXE (BATS 'Chi-X Europe')YesCommon SharesGBCHFMar 2008
          PHMO-UETLX (Eurotlx)YesCommon SharesITEURMar 2008
          PMORWBAG (Wiener Boerse AG)YesCommon SharesATEURMar 2008
          PM *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNMar 2008

          Biography

          Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes, other nicotine-containing products, and smoke-free products and related electronic devices and accessories. The company offers IQOS smoke-free products, including heated tobacco and nicotine-containing vapor products under the HEETS, HEETS Marlboro, and HEETS FROM MARLBORO brands, as well as the Marlboro HeatSticks and Parliament HeatSticks brands. It also sells its products under the Marlboro, Parliament, Bond Street, Chesterfield, L&M, Lark, and Philip Morris brands. In addition, the company owns various cigarette brands, such as Dji Sam Soe, Sampoerna A, and Sampoerna U in Indonesia; Fortune and Jackpot in the Philippines; and Belmont and Canadian Classics in Canada. As of November 21, 2019, Philip Morris International Inc. operated four physical stores in Sweden. It markets and sells its products in the European Union, Eastern Europe, the Middle East, Africa, South and Southeast Asia, East Asia, Australia, Latin America, and Canada. The company was incorporated in 1987 and is headquartered in New York, New York. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/19 00:04
          End of Day Share Price2020/01/17 00:00
          Earnings2019/09/30
          Annual Earnings2018/12/31


          Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.