I've Been Wrong About Philip Morris International Stock for 5 Years. Here's Why I'm Finally Changing My Mind.
Philip Morris has transformed from a declining tobacco play into a higher-margin, smoke-free growth story. Here's why I'm changing my mind on PM.
Overview
I've been wrong about Philip Morris International (NYSE: PM) for years. I avoided the stock on the premise that it wasn't a particularly safe ticker given the industry it operates in. But the company has adapted remarkably well, with a growing portfolio of products beyond traditional tobacco, and the numbers are becoming increasingly difficult to ignore.
The stock closed near $192 recently, and has delivered a 137% total return over the past five years, compared with 71% for the S&P 500. Here's what's changed about the company.
Details
My thesis was simple and lazy. Cigarette volumes have been declining in developed markets, regulators keep tightening, and a tobacco company can't outrun that math. I treated the company as a yield trap that would grind lower while paying me to wait.
Source
Originally published at www.fool.com.