Phillip Morris is a holding company whose principal wholly
owned subsidiaries, Phillip Morris Incorporated, Phillip
Morris International Incorporated, Kraft Foods Incorporated,
and Miller Brewing Company, are engaged in the manufacture
and sale of various consumer products. A wholly owned
subsidiary of the company, Phillip Morris Capital Corporation,
engages in various leasing and investment activities. The
company's significant industry segments are domestic
tobacco, international tobacco, North American food,
international food, beer and financial services.
In 1902, Phillip Morris was incorporated in the United States,
where it began building its global position in the tobacco
business. By the 1950s, Phillip Morris was making its first
forays outside of tobacco. The trend toward diversification
accelerated in 1969-70 with the acquisition of the Miller
Brewing Company, and then again in the mid-1980s with the
purchase of General Foods and Kraft Foods. In 2000, the
historic settlement of claims by State Attorneys General
against the U.S. tobacco industry paved the way for a new era
of engagement and cooperation on tobacco issues.
(Source: Phillip Morris)
Reasons To Invest
Say what you will about Phillip Morris, its stock has been one
of the best performing stocks in the Dow Jones Industrial
Average over the past year, and for good reason, too. The
company's financial position is the envy of many.
In the past year, Phillip Morris generated free cash flow of
more than $15 billion. Its debt is minimal, cash position is
bulky, and its dividend is appealing. Sure, the company's
8 percent estimated growth rate is by no means a barn burner.
But, its reliability is certainly appealing in the current
economic and market environments.
Phillip Morris' businesses are relatively immune from economic
recession. In times of contraction, consumers are less likely
to curb their smoking habits than, say, purchasing a new car
or cell phone. Consumers are less likely to stop eating, too.
Because of its broad, diverse business lines, Phillip Morris
should be able to meet or exceed its earnings projections for
fiscal 2002, which currently call for the company to earn $4.57
per share. That's right, $4.57 per share!
If Phillip Morris at least meets its estimates next year, the
stock would then be given a current forward-looking multiple of
10. In a word, cheap!
But, perhaps the most appealing attribute of shares of Phillip
Morris currently is the stock's big dividend yield. Currently,
the yield on shares of Phillip Morris is approaching 5 percent.
While 5 percent is miniscule to some for an annual return, it's
especially attractive to all those investors with money sitting
on the sidelines in accounts earning less than 3 percent.
Furthermore, with the Federal Reserve expected to take rates
down yet again in early October, the yields on money market
accounts should fall even further. That's why Phillip Morris'
dividend yield may become very attractive in the coming months.
The company's dividend is most certainly safe, and its shares
may even see some capital appreciation as money moves from
money market accounts into relatively safe high yielding stocks.
Shares to Qualify = 1 Accept Foreign Accounts: Yes
Auto-reinvestment = Yes Temper Enrollment Serv: Yes
Min/Max Investment = $10 to $60,000/year
Dividend: 0 Cash: 0 Auto ReInvest: 0
First Chicago Trust
Industry Group: Tobacco, Food 52-week high=$53.88
Annual Dividend Per Share= $2.32 52-week low =$27.50
Last earnings 06/15 est=1.03 actual=1.03
Next earnings 10-17 est=1.07 versus=0.99
P/E = N/A
Strong Buy = 4
Moderate Buy = 4
Hold = 1
Moderate Sell = 0
Strong Sell = 0