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.
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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.
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