Philip Morris International

PM-N

He has an issue that 40% of the S&P earnings come from abroad so it makes it challenging for companies that have even higher international exposure and this one is much higher.

Look at the dividend growth history. It has been very regular. He is big fans of this category. As a business model they are very attractive. Not expensive because of the regulatory risk.

In the developed economies, there is less cigarette consumption so it is more of a volume and pricing story. Because of their perceived litigation risks, these companies trade at quite low multiples and they tend to increase their dividends very regularly. He prefers British-American Tobacco (BTI-A), but likes this one as well. He would suggest that you buy this, hold it and put it away.

Likes the sin stocks and tobacco has been a great investment longer-term. Prefers British American Tobacco (BTI-A) because it doesn’t have the same level of liability risk. Indonesia and Vietnam are big growth drivers for them. Longer-term you should be fine.

Doesn’t think you are going to get a lot of growth out of this. Cigarettes are on the downturn. This is a cash flow income investment, and in this low rate environment, it will find winners. From a growth point of view, no. It is pretty clear that over time, your capital will go down.

A Top Pick (May 2/13. Down 2.17%.) Over time, this company has generated a lot of value for him. The stock has been down because of currency movement. It is a very international company.

Doesn’t see growth in the industry. Globally he is seeing a declining smoking rate. Has a hard time investing in a business that is so bad for you.

Likes this over the long-term. Had a bit of a pull back over the last year, primarily because of foreign exchange, but looking back over the last 10 years, it is one of those great consumer product companies that just generates gobs of free cash flow. At these levels, it is becoming it pretty compelling investment.

Everyone is aware of the health concern. Play on Indonesia and Vietnam because they are big smokers there. Prefers BTI-A.

Cash generating machine. The long term growth outlook is not so robust in developed markets. Growth in emerging markets. Going to underperform in this environment. It is more defensive. Not interested in that category which will decline in the long term.

The best time is in the summer time until the end of the year. We are in a downtrend and it might set up.

The attractive thing about this is the dividend yield. As interest rates start to rise, dividend attractive companies have less appeal. The company itself is still doing very well. Internationally there is more and more resistance to smoking. However, 20% of the people globally still smoke. Outside of China, this company controls about 29% of the market. They have also moved aggressively into electronic smoking. At 14.5X earnings, this is a pretty good place to be.

Likes this as a good solid dividend payer. Despite the fact that there is a 3%-4% decline in cigarette consumption on an annual basis, they have done a tremendous job of harvesting their cash flow. Japan had increase the excise tax, which has diminished demand and resulted in an intense price competition internationally. This is a really good entry point. In the last 5 years, their dividend is up 18%. Yield of 4.58%.

(Market Call Minute) Weakened off and short term outlook has come down but not long term. Take advantage of that.

Yielding a little over 4%. Earnings and cash flow growth is in the 9% range. Not a cheap stock right now. Cigarette companies have margins that are in the 60%-70% range so they don’t have to grow their revenues to have it flow to the bottom line in profitability. Debt to equity ratio is only at 61% so they can leverage the balance sheet and buy back shares if they want. Prefers companies that increase dividends rather than buying back shares.