|Instrument:PHILIP MORRIS INTERNATIONAL
|Trading Hours (GMT):14:30-20:59
Headquartered in Lausanne, Switzerland, Philip Morris International Inc. is the world’s largest publicly traded tobacco company. The company produces hundreds of billions of tobacco products every year, selling them in over 180 countries and territories around the globe. The company was founded in 2008 when it was spun off from Altria. The spin-off was strategic so as to free the company from the harsh standards of American corporate ownership, especially in the controversial tobacco industry.
Nonetheless, Philip Morris traces its roots back to 1847, when tobacconist Philip Morris opened a tobacco and cigarettes shop in London. Over the years, the company has grown to be a leader in the industry. Currently, it has at least a half dozen multi-billion-dollar brands that include Marlboro, ST Dupont Paris, Philip Morris, Dji Sam Soe, Longbeach, U Mild, and Chesterfield.
Since the turn of the millennium, cigarette smoking levels have been decreasing slowly due to its well-publicised side effects. But Philip Morris has been leading the way in delivering a smoke-free future by building innovative products that heat-rather-than-burn tobacco. While not entirely risk-free, these innovative products are much safer than cigarette smoking.
The company has invested heavily in research and development in its bid to become a smoke-free company by 2035. This strategy focus has also impacted its play in the M&A pool. In recent years, Philip Morris has bought companies such as OtiTopic and Rothmans, acquisitions that are consistent with its Beyond Nicotine initiative.
Philip Morris is listed on the NYSE, where it trades under the ticker symbol PM. The stock is categorised in the Consumer Defensive sector, under the Tobacco industry. The stock also has a secondary listing on the Zurich-based SIX Swiss Exchange, where it trades under the ticker symbol PMI.
Philip Morris Stock History
Philip Morris has never implemented any stock split since the 2008 spin-off. The stock traded around $50 in 2008 and initially drifted to lows of below $35 by March 2009 due to the effects of the Great Recession.
It, however, turned higher and rallied steadily to above $90 by August 2012. A period of consolidation then followed until late 2016, when the stock began its upward momentum that drove it to its all-time high of circa $123 in June 2017. An extended period of market correction then saw the stock dip to lows of circa $65 by December 2018. The stock attempted to recover but the COVID-19-inspired market downturn curtailed its efforts and pushed it to lows of circa $60 by March 2020. The subsequent market recovery then provided tailwinds for the PM stock that has since reclaimed the $100-mark as of September 2021.
Philip Morris’s cash-flow positive business has made the company one of the highest dividend payers on Wall Street. The company has consistently raised its payouts since 2008 and currently pays a dividend of $4.71 with a dividend yield of 4.55% as of 2021.
How to Trade Philip Morris Stock
Here are some of the factors to consider when trading PM stock:
- Legislative and Taxation Factors
According to the WHO, tobacco is one of the leading causes of cancer and death in the world. This means that the product is one of the most closely regulated in practically every jurisdiction around the world. In addition to regulatory scrutiny, tobacco is also one of the most highly taxed products in the world. This leaves the company vulnerable to sudden changes in legislative or taxation issues, something which can greatly impact its top and bottom lines.
- New Product Rollout
With consumer preferences changing in light of awareness of the risks of tobacco, the rollout of new healthier alternatives of cigarettes can make or break the Philip Morris fortunes going forward. Already, Philip Morris has led the way with the FDA-approved IQOS products that heat tobacco to release less harmful chemicals than traditional cigarette smoking. The company is also introducing another heated tobacco system called TEEPS as well as a vaporiser known as STEEM. The acceptance and adoption of these new products can help cushion the company against falling revenues in the future.
The tobacco industry is highly competitive, and Philip Morris has to fight off other Big Tobacco companies such as Altria, Imperial Brands, British American Tobacco, and Japan Tobacco International. In different jurisdictions worldwide, the company also has to deal with state-owned companies that are given preferential treatment in the market. Competition in the tobacco industry is in areas such as taste, brand loyalty, new products, marketing, pricing, brand recognition, and other innovations.
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