Thursday, April 19, 2018

Tobacco Companies Offer An Opportunity For Income Investors

I was reviewing my portfolio today, and noticed that tobacco companies are getting smoked this morning. Phillip Morris International is down 16% as of the time of this writing, while Altria is down 8%.

Altria yields close to 5% today, and sells at a forward P/E of 14.20. PMI also yields 5% and sells at a forward P/E of 16.20.

I believe that this is an overreaction to the slight revenue miss by Phillip Morris International this morning. I also believe that these stocks could get lower today too. As a result, I believe that there is some opportunity to start reviewing tobacco companies for further research. I am going to look closely into adding more shares on the way down. 

I already own too much Phillip Morris International (PM), but I do want to add some more to Altria (MO).

You may check my last analysis of Altria here:

That being said, it is better to slowly add to positions over time, and not put everything at once. This is a risk management technique I learned during the 2007 - 2009 bear market.
Thank you for reading!

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