I can’t think of a stock that’s more hated.
We’ve written about this company several times before. And just about every time we mention it, we end up receiving nasty emails admonishing the fact that we would cover — let alone recommend — investors own shares of this company.
In fact, it happens so often that whenever we cover this stock, I instruct our staff to put in a mention that this investment isn’t for everyone. If you don’t want to invest in this stock, I can certainly understand. But if you have an open mind toward this black sheep, you’re likely to appreciate what it can do for you.
Simply take a look at its performance in the past five years…
In another year marked by stagnating growth, a slowdown in emerging markets and uncertainty almost everywhere, the most hated company on the planet — Philip Morris International Inc. (NYSE:PM) — is still making investors rich.
Unfortunately, I’ve noticed that more and more investors seem to be tricked into thinking investing has to be complicated. But stocks like Philip Morris prove that making money doesn’t have to be hard.
Philip Morris doesn’t have a complicated business model. It is simply one of the most dominant and shareholder-friendly companies on the planet. The company does business in more than 180 countries and owns seven of the world’s top 15 global brands in its market.
But it has also made a mission of rewarding its shareholders. In the last five years, it has returned more than $22 billion in dividends while increasing the payments per share by 84.8%.
Today, the shares already pay a healthy yield of 4.3%. But if you bought shares today and Phillip Morris kept raising its dividend by 16% a year (as it has averaged over the past five years), your dividend income would nearly double and you’d collect a yield of 7.9% just five years from now.
Then there are the buybacks. Since May 2008, the company has repurchased more than $27 billion in stock — or nearly 23% of the outstanding shares. And the company recently announced another three-year, $18 billion stock repurchase plan that began a year ago.
All of these moves simply make the stock more valuable, even if earnings don’t rise a cent. And as you can see in the chart above, that’s showing up in the share price as well.
Of course, with investing there’s never a surefire thing. There’s no quality a company can possess that will guarantee its success.
Action to Take –> But there’s a reason I named Philip Morris one of my Top 10 Stocks for 2014. When you can find companies that dominate their market and are returning billions to investors, these stocks that can still deliver strong returns in nearly any market — including this one.
[Note: In my latest research — Top 10 Stocks for 2014 — I’ve uncovered several more investments that are similar to Philip Morris. They dominate their markets, pay increasing dividends, and repurchase billions in stock. To learn more about these ideas, including several names and ticker symbols, I invite you to visit this link.]
– Elliott Gue
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