Only 3 Days Left Before Philip Morris International Inc (NYSE:PM) Will Start Trading Ex-Dividend, Is It Worth Buying?

Important news for shareholders and potential investors in Philip Morris International Inc (NYSE:PM): The dividend payment of $1.07 per share will be distributed into shareholder on 11 April 2018, and the stock will begin trading ex-dividend at an earlier date, 21 March 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Philip Morris International's latest financial data to analyse its dividend characteristics. View our latest analysis for Philip Morris International

5 questions I ask before picking a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Does it pay an annual yield higher than 75% of dividend payers?
• Does it consistently pay out dividends without missing a payment or significantly cutting payout?
• Has dividend per share risen in the past couple of years?
• Is it able to pay the current rate of dividends from its earnings?
• Will it be able to continue to payout at the current rate in the future?

How does Philip Morris International fare?

Philip Morris International has a trailing twelve-month payout ratio of 108.78%, meaning the dividend is not sufficiently covered by its earnings. In the near future, analysts are predicting a more sensible payout ratio of 75.09%, leading to a dividend yield of around 4.47%. Furthermore, EPS should increase to $5.28, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you're eyeing out is reliable in its payments. PM has increased its DPS from $1.84 to $4.28 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes PM a true dividend rockstar. Relative to peers, Philip Morris International generates a yield of 4.14%, which is on the low-side for Tobacco stocks.

Next Steps:

Taking into account the dividend metrics, Philip Morris International ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I've put together three relevant aspects you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for PM’s future growth? Take a look at our free research report of analyst consensus for PM’s outlook.
2. Valuation: What is PM worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether PM is currently mispriced by the market.
3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.