Philip Morris's most recent trend suggests a bullish bias. One trading opportunity on Philip Morris is a Bull Put Spread using a strike $82.50 short put and a strike $77.50 long put offers a potential 17.92% return on risk over the next 24 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $82.50 by expiration. The full premium credit of $0.76 would be kept by the premium seller. The risk of $4.24 would be incurred if the stock dropped below the $77.50 long put strike price.
The 5-day moving average is moving up which suggests that the short-term momentum for Philip Morris is bullish and the probability of a rise in share price is higher if the stock starts trending.
The 20-day moving average is moving up which suggests that the medium-term momentum for Philip Morris is bullish.
The RSI indicator is above 80 which suggests that the stock is in overbought territory.
To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here
LATEST NEWS for Philip Morris
Is MO Stock A Buy? Tobacco Giant Altria Is In A Buy Zone, But Comes With A Warning Label
Fri, 18 Dec 2020 17:51:09 +0000
Altria is trying to become less of a cigarette company as demand fades. Is MO stock a buy? Its recent breakout comes with a warning label.
RRPs Gaining Popularity: 3 Tobacco Stocks to Watch in 2021
Thu, 17 Dec 2020 13:23:01 +0000
Tobacco industry players like PM, MO, and TPB are poised to benefit from rising popularity of low-risk tobacco alternatives. However, low cigarette sales volumes are likely to remain a headwind.
Income Investors Should Consider These 3 Tobacco Stocks
Fri, 11 Dec 2020 20:47:33 +0000
Tobacco stocks have long been a favorite among income investors. Why? For one, they often pay high dividend yields above 5%. A select few have also maintained long histories of raising their dividends, even during recessions.
On top of that, the industry enjoys multiple advantages that make it attractive for investment. The best names in tobacco have the ability to raise prices over time, while demand for tobacco products remains steady during economic downturns. The industry also benefits from high returns on invested capital as well as high barriers to entry.
As a result, tobacco stocks are ripe for the picking — particularly for income investors looking for high dividend yields and stable payouts.InvestorPlace – Stock Market News, Stock Advice & Trading Tips
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But what are the best opportunities in tobacco out there right now? These three stocks all have yields above 5%, consistent dividend track records and future dividend growth potential.
Altria (NYSE:MO)
Philip Morris International (NYSE:PM)
Universal Corporation (NYSE:UVV)
Tobacco Stocks to Buy: Altria (MO)
Source: Kristi Blokhin / Shutterstock.com
Dividend Yield: 8.01%
MO stock is probably one of the most notable tobacco stocks in the United States, with its flagship Marlboro brand commanding 40% retail market share. On top of that, Altria also owns the popular chewing tobacco brands Skoal and Copenhagen, Ste. Michelle wine and an approximate 10% investment stake in global beer giant Anheuser-Busch (NYSE:BUD).
Altria is a legendary dividend stock. The company has raised its dividend for 50 years in a row, placing it on the exclusive list of 30 Dividend Kings. In part, it owes success to its durable competitive advantages, generating extremely high returns on capital while reaping significant economies of scale in production and distribution.
And because it possesses the top brand, Altria can raise prices over time to grow revenue. MO has even continued to perform well in 2020 despite the pandemic. In the most recent quarter, revenue of $5.67 billion increased 4.9% year-over-year (YOY) and beat analyst estimates. Meanwhile, adjusted earnings per share (EPS) came to $1.19, beating projections by 4 cents.
Finally, in response to the declining smoking rate, it has also made investments in new categories, highlighted by the $13 billion purchase of a 35% stake in e-vapor company Juul. This gave Altria exposure to a high-growth category. On top of that, it also recently announced a $1.8 billion investment in Canadian cannabis company Cronos (NASDAQ:CRON). That made for a 45% equity stake in CRON, as well as a warrant to acquire an additional 10% ownership interest. Lastly, Altria has put extensive research and development into its own heat-not-burn tobacco product IQOS.
The combination of vaping, marijuana and new tobacco products will fuel Altria’s future growth, even if traditional cigarettes continue to decline. Its investment in Anheuser-Bush as well as in wine and smokeless tobacco businesses will also continue to provide growth, securing its hefty dividend.
Philip Morris International (PM)
Source: defotoberg / Shutterstock.com
Dividend Yield: 5.65%
Next on my list of tobacco stocks is Philip Morris International, a company that spun off from Altria over a decade ago. Today, PM sells the Marlboro brand and many others outside of the United States. While Altria dominates the States, PM has the rights in international markets.
While 2020 has negatively impacted PM stock, it has performed relatively well considering the difficult operating climate. Net revenue declined 1.5% in Q3 2020, as many international markets have experienced an economic downturn due to the pandemic. However, the company’s ability to raise prices drove 6.5% revenue growth per unit and 5.6% adjusted diluted EPS growth. Over the first three quarters combined, adjusted diluted EPS rose 7.4%.
So, Philip Morris’ consistent profitability and steady earnings growth has allowed the company to maintain its dividend. PM even delivered a 2.6% dividend increase in September.
Like Altria, the company has also waged its future on new products. But whereas MO has meaningfully expanded into adjacent vice categories such as beer, wine and marijuana, PM is staking its future on IQOS. The company greatly increased its capital expenses in the last two years in order to develop and manufacture this new product. IQOS has met great success in some markets, like Japan and Korea.
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The revenue generated by PM’s reduced-risk portfolio has gone from essentially zero in 2014 to nearly $5 billion annually (Page 13). Over the first nine months of 2020, PM’s reduced-risk products (RRPs) accounted for 23% of its total revenue in that period. Continued growth from RRPs will allow the company to keep increasing its dividend.
Universal Corporation (UVV)
Source: Shutterstock
Dividend Yield: 6.20%
Universal Corporation is one of the world’s largest leaf tobacco exporters and importers. The company is a wholesale purchaser and processor of tobacco operating between farms and the companies that manufacture cigarettes, cigars and pipe tobacco.
Like Altria, Universal is a Dividend King, as it has also raised its dividend payout for 50 consecutive years. Because of its leadership position in processing, UVV has also maintained a long track record of steady profitability in the face of declining smoking rates. In addition, price increases have offset reduced demand, helping the company stay profitable. Last year it reported adjusted EPS of $3.49 Maintaining that consistent profitability has allowed the company to return excess profits to shareholders through dividends and share repurchases.
Going forward, Universal intends to continue diversifying its business model. In response to the falling smoking rate, it has branched out into processing other produce like fruits and vegetables. In fact, the firm has conducted multiple acquisitions in this area to accelerate efforts.
For example, last year UVV acquired FruitSmart, a specialty fruit and vegetable ingredient processor. FruitSmart supplies juices, concentrates, blends, purees, fibers and more to food, beverage and flavor companies around the world. On Oct. 1, Universal also completed its acquisition of Silva International, a dehydrated vegetable, fruit and herb processing company.
These efforts should help UVV stock adapt to the difficult situation facing the tobacco industry as well as allow it to maintain the Dividend King title. That makes this name a top contender among tobacco stocks for the income investor.
On the date of publication, Bob Ciura held a long position in MO.
Bob Ciura has worked at Sure Dividend since 2016. He oversees all content for Sure Dividend and its partner sites. Prior to joining Sure Dividend, Bob was an independent equity analyst. His articles have been published on major financial websites such as The Motley Fool, Seeking Alpha, Business Insider and more. Bob received a bachelor’s degree in Finance from DePaul University and an MBA with a concentration in investments from the University of Notre Dame.
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The post Income Investors Should Consider These 3 Tobacco Stocks appeared first on InvestorPlace.
Altria Has Had a Tough Year. Why 2021 May Be Better.
Fri, 11 Dec 2020 16:55:00 +0000
Analyst Michael Lavery reiterated an Overweight rating on (MO) (ticker: MO) Friday, while raising his price target by $10, to $57. IQOS’s initial success in Atlanta is especially promising, Lavery notes, because the product has gained impressive market share in other nations where it previously launched, and a similar acceleration in the U.S. would bode well for Altria’s profits.
Ferrari Faces New Leadership Crisis After CEO Abruptly Resigns
Fri, 11 Dec 2020 11:54:22 +0000
(Bloomberg) — Ferrari NV has started to search for a new chief executive officer to resolve its second leadership crisis in as many years after Louis Camilleri abruptly resigned, complicating the Italian supercar maker’s transition toward electric mobility.Ferrari has scheduled a board meeting next week to discuss the replacement process, according to people familiar with the matter. Chairman John Elkann will for now take the role on an interim basis. He has to find a new leader just 30 months after picking Camilleri to succeed Sergio Marchionne, who died in July 2018 from complications after a surgery.Chief Marketing and Commercial Officer Enrico Galliera is among the potential internal candidates after leading Ferrari’s sales efforts for the past decade, the people said, declining to be named because the deliberations are private. A spokesman for Ferrari declined to comment.Camilleri, 65, is leaving after he had to be hospitalized for Covid-19. He’s recovering at home and the infection wasn’t the main reason for his exit, a company spokesman said, without elaborating. Camilleri also stepped down as chairman of Philip Morris International Inc.His departure comes at a difficult time for the former unit of Fiat Chrysler Automobiles NV. The coronavirus pandemic has depressed auto sales just as the industry is shifting away from the internal combustion engine — a key feature of the high-powered Ferrari cars.Ferrari declined 0.7% at 12:11 p.m. in Milan, valuing the company at about 34 billion euros ($41 billion). The stock has gained about a fifth this year, for the best performance in the Stoxx 600 Automobiles & Parts Index.Whoever becomes new CEO will have “big shoes to fill,” Angus Tweedie, an analyst at Citigroup, said in a note. He pointed to questions about whether the company can achieve its 2022 profitability targets, roll out new models including the PuroSangue SUV and shift the supercar maker toward an emissions-free fleet.Camilleri was a Ferrari board member when he took over as CEO from Marchionne, who died within days of being replaced. Marchionne orchestrated Ferrari’s 2016 spin-off from Fiat Chrysler, where he also served as CEO.Ferrari has managed the pandemic better than expected, fielding orders for its six- and seven-figure supercars at rates similar to last year, the company said in November.Ferrari TransformationDuring his stint as CEO, Camilleri oversaw the transformation of Ferrari into a fully fledged luxury brand. He revamped Ferrari’s lineup so it could keep boosting prices. The company introduced five new models in 2019, which helped increase annual sales to more than 10,000 units for the first time.“Louis showed an unswerving sense of responsibility ensuring continuity for our organization, while guiding Ferrari into the future with an ambitious and far-sighted strategic plan,” Elkann said in a letter to workers.Exor NV, the investment company for the Agnelli family, controls Ferrari with 36% of its voting rights and a direct 23% stake. The supercar maker was listed in New York in 2015.Elkann, the scion of the Agnelli family, is set to become chairman of Stellantis, the company which will start its operations next year following the combination of Fiat Chrysler Automobiles NV with Peugeot-maker PSA Group.One looming question for Camilleri’s successor is how Ferrari will cope with more stringent emissions regulations in the European Union and other markets. While the company has said that 60% of its models will have a hybrid powertrain by 2022, Camilleri has expressed doubts the brand would go fully electric.Emissions PressureHe recently criticized European environmental regulations that aim to cut transport emissions by penalizing the sale of vehicles with particularly inefficient engines, saying they fail to take into account how infrequently some are driven.“If you take a V-12 Ferrari that only runs 3,000 kilometers a year, probably it has less emissions than a very small car that runs every day,” he said during an investor call last month.At Philip Morris, his exit triggered an orderly succession plan that’s been in place for some time, the company said. The tobacco company’s CEO Andre Calantzopoulos will become executive chairman right before the annual shareholders meeting in May, it said.Lucio Noto, the company’s independent presiding director, will serve as interim chair in the meantime. Chief Operating Officer Jacek Olczak will succeed Calantzopoulos as CEO when he takes the chairman spot.The tobacco giant has long been a sponsor of Ferrari’s Formula One racing teams, but Camilleri had no direct automotive experience, which made him a somewhat controversial pick to run one of the world’s pre-eminent car brands.(Updates with information on replacement process in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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