Should Philip Morris Raise Its Dividend?

With all of the global economic strain, many investors are pressuring those companies that can afford it to increase their dividend yield. Nothing says safe and steady like regular large payments to shareholders. If you're invested in the tobacco space, you know that dividend payouts frequently near 100% of earnings. That's why Philip Morris' (NYSE: PM  ) 55% payout ratio seems like a great place to squeeze a little extra yield. 

But Philip Morris is more growth-minded than its tobacco company peers, and that cash is better kept in house for expansion, not to mention for funding its $18 billion, three-year share repurchase plan, which I believe will be more impactful to its bottom line than reinvested dividends.

Just because Philip Morris shouldn't up its dividend doesn't mean your hunt for great dividend stocks ends there. The Motley Fool has compiled a special free report outlining our nine top dependable dividends. It's called  "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your complimentary copy today at no cost! Just click here to discover the winners we've picked.

Austin Smith owns shares of Philip Morris International. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Philip Morris International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 01, 2012, at 7:21 PM, bjl2113 wrote:

    The stated goal of the company is to maintain a 65% payout ratio on their dividend. Please do basic research on a company before trying to write an article about it.

  • Report this Comment On August 02, 2012, at 8:22 AM, binary512 wrote:

    If you knew any better, you would know that PM usually votes to raise its dividend at the August board meeting. This makes the whole article moot.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1968264, ~/Articles/ArticleHandler.aspx, 10/22/2016 4:00:16 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 18 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

6/12/2015 4:05 PM
LO.DL $0.00 Down +0.00 +0.00%
Lorillard CAPS Rating: ****
MO $63.70 Up +1.85 +2.99%
Altria Group CAPS Rating: ****
PM $96.31 Up +0.74 +0.77%
Philip Morris Inte… CAPS Rating: ****
RAI $53.78 Up +6.61 +14.01%
Reynolds American CAPS Rating: ****
VGR $20.74 Up +0.64 +3.18%
Vector Group CAPS Rating: ***