PHILIP MORRIS INTERNATIONAL (PM) Stock Fundamental Analysis
NYSE:PM - New York Stock Exchange, Inc. - US7181721090 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to PM. PM was compared to 8 industry peers in the Tobacco industry. While PM belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, PM is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
PM had positive earnings in the past year.
PM had a positive operating cash flow in the past year.
PM had positive earnings in each of the past 5 years.
Each year in the past 5 years PM had a positive operating cash flow.
1.2 Ratios
PM has a better Return On Assets (11.38%) than 87.50% of its industry peers.
The Return On Invested Capital of PM (26.67%) is better than 87.50% of its industry peers.
PM had an Average Return On Invested Capital over the past 3 years of 25.07%. This is significantly above the industry average of 16.98%.
The last Return On Invested Capital (26.67%) for PM is above the 3 year average (25.07%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.38% | ||
| ROE | N/A | ||
| ROIC | 26.67% |
ROA(3y)12.65%
ROA(5y)15.58%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)25.07%
ROIC(5y)31.2%
1.3 Margins
PM has a better Profit Margin (18.57%) than 75.00% of its industry peers.
In the last couple of years the Profit Margin of PM has declined.
PM has a better Operating Margin (35.93%) than 87.50% of its industry peers.
PM's Operating Margin has been stable in the last couple of years.
PM has a better Gross Margin (64.81%) than 87.50% of its industry peers.
In the last couple of years the Gross Margin of PM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 35.93% | ||
| PM (TTM) | 18.57% | ||
| GM | 64.81% |
OM growth 3Y-4.61%
OM growth 5Y-0.93%
PM growth 3Y-13.73%
PM growth 5Y-5.04%
GM growth 3Y-1.62%
GM growth 5Y0.03%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PM is creating value.
The number of shares outstanding for PM remains at a similar level compared to 1 year ago.
The number of shares outstanding for PM remains at a similar level compared to 5 years ago.
PM has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.10 indicates that PM is not in any danger for bankruptcy at the moment.
PM has a better Altman-Z score (4.10) than 75.00% of its industry peers.
PM has a debt to FCF ratio of 4.24. This is a neutral value as PM would need 4.24 years to pay back of all of its debts.
The Debt to FCF ratio of PM (4.24) is better than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 4.24 | ||
| Altman-Z | 4.1 |
ROIC/WACC3.34
WACC7.98%
2.3 Liquidity
A Current Ratio of 0.88 indicates that PM may have some problems paying its short term obligations.
The Current ratio of PM (0.88) is worse than 62.50% of its industry peers.
A Quick Ratio of 0.47 indicates that PM may have some problems paying its short term obligations.
PM has a Quick ratio of 0.47. This is in the lower half of the industry: PM underperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.47 |
3. Growth
3.1 Past
PM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.99%, which is quite good.
The Earnings Per Share has been growing slightly by 4.72% on average over the past years.
PM shows a small growth in Revenue. In the last year, the Revenue has grown by 7.44%.
The Revenue has been growing slightly by 4.91% on average over the past years.
EPS 1Y (TTM)8.99%
EPS 3Y2.57%
EPS 5Y4.72%
EPS Q2Q%13.97%
Revenue 1Y (TTM)7.44%
Revenue growth 3Y6.45%
Revenue growth 5Y4.91%
Sales Q2Q%7.28%
3.2 Future
Based on estimates for the next years, PM will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.38% on average per year.
PM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.64% yearly.
EPS Next Y12.03%
EPS Next 2Y11.13%
EPS Next 3Y10.6%
EPS Next 5Y10.38%
Revenue Next Year6.55%
Revenue Next 2Y7.26%
Revenue Next 3Y7.05%
Revenue Next 5Y7.64%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 24.92 indicates a rather expensive valuation of PM.
62.50% of the companies in the same industry are cheaper than PM, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.29. PM is around the same levels.
A Price/Forward Earnings ratio of 22.24 indicates a rather expensive valuation of PM.
PM's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.08. PM is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.92 | ||
| Fwd PE | 22.24 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PM is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PM indicates a somewhat cheap valuation: PM is cheaper than 62.50% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.58 | ||
| EV/EBITDA | 19.19 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PM has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.07
PEG (5Y)5.27
EPS Next 2Y11.13%
EPS Next 3Y10.6%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.57%, PM has a reasonable but not impressive dividend return.
PM's Dividend Yield is a higher than the industry average which is at 4.29.
PM's Dividend Yield is a higher than the S&P500 average which is at 2.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.57% |
5.2 History
The dividend of PM has a limited annual growth rate of 2.76%.
PM has paid a dividend for at least 10 years, which is a reliable track record.
PM has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)2.76%
Div Incr Years15
Div Non Decr Years15
5.3 Sustainability
116.53% of the earnings are spent on dividend by PM. This is not a sustainable payout ratio.
PM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP116.53%
EPS Next 2Y11.13%
EPS Next 3Y10.6%
163.21
+2.73 (+1.7%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryTobacco
Earnings (Last)
Earnings (Next)
Inst Owners80.71%
Inst Owner Change0%
Ins Owners0.13%
Ins Owner Change-7.29%
Market Cap254.03B
Analysts83.48
Price Target152.2 (-6.75%)
Short Float %1.11%
Short Ratio2.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.57% |
Yearly Dividend5.28
Dividend Growth(5Y)2.76%
DP116.53%
Div Incr Years15
Div Non Decr Years15
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.11%
Min EPS beat(2)0.44%
Max EPS beat(2)1.78%
EPS beat(4)3
Avg EPS beat(4)0.95%
Min EPS beat(4)-1.59%
Max EPS beat(4)3.16%
EPS beat(8)5
Avg EPS beat(8)0.1%
EPS beat(12)9
Avg EPS beat(12)2.89%
EPS beat(16)10
Avg EPS beat(16)2.49%
Revenue beat(2)0
Avg Revenue beat(2)-0.41%
Min Revenue beat(2)-0.69%
Max Revenue beat(2)-0.13%
Revenue beat(4)2
Avg Revenue beat(4)0.02%
Min Revenue beat(4)-0.69%
Max Revenue beat(4)0.81%
Revenue beat(8)3
Avg Revenue beat(8)-1.01%
Revenue beat(12)7
Avg Revenue beat(12)1.42%
Revenue beat(16)9
Avg Revenue beat(16)0.96%
PT rev (1m)0.52%
PT rev (3m)8.52%
EPS NQ rev (1m)0.55%
EPS NQ rev (3m)-2.3%
EPS NY rev (1m)-0.18%
EPS NY rev (3m)-0.76%
Revenue NQ rev (1m)0.5%
Revenue NQ rev (3m)-0.88%
Revenue NY rev (1m)0.84%
Revenue NY rev (3m)0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.92 | ||
| Fwd PE | 22.24 | ||
| P/S | 6.71 | ||
| P/FCF | 23.58 | ||
| P/OCF | 20.79 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.19 |
EPS(TTM)6.55
EY4.01%
EPS(NY)7.34
Fwd EY4.5%
FCF(TTM)6.92
FCFY4.24%
OCF(TTM)7.85
OCFY4.81%
SpS24.34
BVpS-7.55
TBVpS-25.49
PEG (NY)2.07
PEG (5Y)5.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.38% | ||
| ROE | N/A | ||
| ROCE | 35.01% | ||
| ROIC | 26.67% | ||
| ROICexc | 29.9% | ||
| ROICexgc | 151.58% | ||
| OM | 35.93% | ||
| PM (TTM) | 18.57% | ||
| GM | 64.81% | ||
| FCFM | 28.44% |
ROA(3y)12.65%
ROA(5y)15.58%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)25.07%
ROIC(5y)31.2%
ROICexc(3y)27.51%
ROICexc(5y)37.8%
ROICexgc(3y)111.48%
ROICexgc(5y)109.03%
ROCE(3y)35.09%
ROCE(5y)42.41%
ROICexcg growth 3Y8.03%
ROICexcg growth 5Y11.03%
ROICexc growth 3Y-18.85%
ROICexc growth 5Y-9.39%
OM growth 3Y-4.61%
OM growth 5Y-0.93%
PM growth 3Y-13.73%
PM growth 5Y-5.04%
GM growth 3Y-1.62%
GM growth 5Y0.03%
F-Score6
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 4.24 | ||
| Debt/EBITDA | 2.75 | ||
| Cap/Depr | 80.81% | ||
| Cap/Sales | 3.81% | ||
| Interest Coverage | 8.73 | ||
| Cash Conversion | 79.35% | ||
| Profit Quality | 153.16% | ||
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.47 | ||
| Altman-Z | 4.1 |
F-Score6
WACC7.98%
ROIC/WACC3.34
Cap/Depr(3y)88.63%
Cap/Depr(5y)80.44%
Cap/Sales(3y)3.65%
Cap/Sales(5y)3.09%
Profit Quality(3y)120.71%
Profit Quality(5y)120.05%
High Growth Momentum
Growth
EPS 1Y (TTM)8.99%
EPS 3Y2.57%
EPS 5Y4.72%
EPS Q2Q%13.97%
EPS Next Y12.03%
EPS Next 2Y11.13%
EPS Next 3Y10.6%
EPS Next 5Y10.38%
Revenue 1Y (TTM)7.44%
Revenue growth 3Y6.45%
Revenue growth 5Y4.91%
Sales Q2Q%7.28%
Revenue Next Year6.55%
Revenue Next 2Y7.26%
Revenue Next 3Y7.05%
Revenue Next 5Y7.64%
EBIT growth 1Y1.83%
EBIT growth 3Y1.54%
EBIT growth 5Y3.93%
EBIT Next Year19.22%
EBIT Next 3Y11.82%
EBIT Next 5Y10.29%
FCF growth 1Y36.66%
FCF growth 3Y-1.34%
FCF growth 5Y3.12%
OCF growth 1Y32.74%
OCF growth 3Y0.69%
OCF growth 5Y3.9%