NYSE:PM

Stock Analysis Report

Executive Summary

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

Rewards

Trading at 38.5% below its fair value

Earnings are forecast to grow 9.12% per year

Pays a high and reliable dividend of 5.29%

Risk Analysis

Has a high level of debt

Dividend of 5.29% is not well covered by earnings



Snowflake Analysis

Established dividend payer and slightly overvalued.


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

1.2%

PM

-2.2%

US Tobacco

1.8%

US Market


1 Year Return

6.0%

PM

-7.9%

US Tobacco

20.1%

US Market

Return vs Industry: PM exceeded the US Tobacco industry which returned -7.9% over the past year.

Return vs Market: PM underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

PMIndustryMarket
7 Day1.2%-2.2%1.8%
30 Day-0.2%-11.6%1.4%
90 Day4.4%-5.9%8.8%
1 Year12.3%6.0%-1.8%-7.9%22.7%20.1%
3 Year-0.9%-14.6%-27.4%-37.7%50.1%40.4%
5 Year35.5%6.6%2.6%-18.4%72.9%53.9%

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?

38.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PM ($88.5) is trading below our estimate of fair value ($143.9)

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 (19.2x) compared to the Tobacco industry average (14.1x).

PE vs Market: PM is poor value based on its PE Ratio (19.2x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: PM is poor value based on its PEG Ratio (2.1x)


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?

9.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PM's forecast earnings growth (9.1% per year) is above the savings rate (1.7%).

Earnings vs Market: PM's earnings (9.1% 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 (4.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: PM's revenue (4.4% 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?

0.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PM has high quality earnings.

Growing Profit Margin: PM's current net profit margins (24%) are lower than last year (26.6%).


Past Earnings Growth Analysis

Earnings Trend: PM's earnings have grown by 0.6% per year over the past 5 years.

Accelerating Growth: PM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PM had negative earnings growth (-9.2%) over the past year, making it difficult to compare to the Tobacco industry average (2.3%).


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 (32.6%).

Interest Coverage: PM's interest payments on its debt are well covered by EBIT (19.1x 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?

5.29%

Current Dividend Yield


Dividend Yield vs Market

company5.3%marketbottom25%1.4%markettop25%3.7%industryaverage6.3%forecastin3Years5.7%

Current dividend yield vs market & industry

Notable Dividend: PM's dividend (5.29%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: PM's dividend (5.29%) is in the top 25% of dividend payers in the US market (3.68%)


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 (100.2%), 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 (80% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

André Calantzopoulos (61yo)

6.8yrs

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 ($USD15.93M) is above average for companies of similar size in the US market ($USD10.82M).

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


Leadership Team

NamePositionTenureCompensationOwnership
André Calantzopoulos
CEO & Director6.8yrsUS$15.93m0.045% $61.7m
Martin King
Chief Financial Officer2.1yrsUS$3.86m0.0091% $12.5m
Jacek Olczak
Chief Operating Officer2.1yrsUS$6.07m0.014% $19.7m
Marc Firestone
President of External Affairs & General Counsel7.7yrsUS$6.23m0.011% $15.5m
Miroslaw Zielinski
Chief New Ventures Officer2.1yrsUS$5.34m0.014% $18.8m
Frank De Rooij
Vice President of Treasury & Corporate Finance0yrsno data0.00072% $991.4k
Michael Voegele
Chief Technology Officer1yrsno datano data
Patrick Brunel
Chief Information Officer0yrsno datano data
Manuel Peitsch
Chief Science Officer0yrsno datano data
Nicholas Rolli
Vice President of Investor Relations and Financial Communications0yrsno datano data

2.1yrs

Average Tenure

54.5yo

Average Age

Experienced Management: PM's management team is considered experienced (2.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
André Calantzopoulos
CEO & Director6.8yrsUS$15.93m0.045% $61.7m
Louis Camilleri
Non-Executive Chairman5.2yrsUS$700.00k0.025% $34.2m
Stephen Wolf
Independent Director12.1yrsUS$300.00k0.0015% $2.1m
Lucio Noto
Independent Presiding Director0yrsUS$325.00k0.0025% $3.5m
Jun Makihara
Independent Director5.4yrsUS$335.00k0.00022% $302.9k
Kalpana Morparia
Independent Director8.2yrsUS$335.00k0.0011% $1.5m
Werner Geissler
Independent Director5.1yrsUS$335.00k0.0040% $5.6m
Robert Polet
Independent Director8.4yrsUS$300.00k0.0012% $1.6m
Frederik Paulsen
Independent Director5.4yrsno datano data
Xin-Zhe Li
Independent Director9.8yrsUS$335.00k0.0042% $5.8m

6.8yrs

Average Tenure

65yo

Average Age

Experienced Board: PM's board of directors are considered experienced (6.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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$137.698b
  • 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, 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; and Fortune and Jackpot in the Philippines. 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. Philip Morris International Inc. 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 Analysis2020/02/16 00:10
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.