PMI's 2022 Dividend Distribution Ratio Reached 92%

Market
Jan.05.2023

Nina Lyu

 

PMI's 2022 full-year dividend yield is in the range of 2.1% to 5%.

 

With a market capitalization of $157 billion, PMI owns the top heat not burn (HnB) brand IQOS in addition to its dominant Marlboro cigarette brand.

 

Since its launch in 2014, IQOS has grown to a customer base of 19.5 million. IQOS sales growth has compensated for declining cigarette sales. That's why PMI's total sales grew 3.4% in the first nine months of 2022.

 

Analysts at the New York Stock Exchange believe that the company's earnings will grow at an annual rate of 2.8% over the next five years and that PMI's dividend distribution ratio will be around 92% in 2022.

 

At first glance, this seems high. But because tobacco companies need minimal capital to operate, this distribution rate should be sustainable in the near term. Since PMI's dividend will grow at a slower rate than its earnings over the next few years, the dividend should be very safe.

 

Most importantly, income investors can snap up shares of the tobacco giant and its 5% dividend yield at a reasonable valuation. The stock's forward P/E ratio of 18.7 is higher than the tobacco industry's average forward P/E ratio of 13.4.

 

Special Note: This article is not intended as an investment reference or recommendation.

*This article is an original article of 2FIRSTS Technology Co., Ltd. The copyright and license rights belong to the company. Any entity or individual shall make link and credit 2FIRSTS when taking actions to copy, reprint or distribute the original article. The company retains the right to pursue its legal responsibility.

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