This afternoon, about two minutes before the closing bell, I bought 11 shares of PM for $46.48. You may recognize PM as Phillip Morris International. MO is the symbol for Altria, the United States holding company for Phillip Morris in the United States and several other diverse businesses. I am trying to make investments in lots of at least $500, which is why I picked an odd number of shares.
I believe the fundamentals of PM are stronger than MO. I considered MO because of its high 7% dividend, but I believe the risks of the tobacco industry in the United States are too high to justify purchasing a tobacco stock that relies on the US as a revenue base at this time. PM is paying over 5%, and no single country will make or break its profitability and free cash flow generation.
I did think twice before buying a tobacco company. I have mixed feelings toward this industry. I now want more people to smoke internationally so I can make more money, but I also want to see people stop smoking for health reasons. If smoking laws toughen up in the US, at least, it will not hurt my bottom line directly.
I have asked the readers about sin stocks once before, and I still want to know what you think. Would you buy a company even if you don’t agree with what they do? I obviously was comfortable enough to hit the purchase button, but I did think twice. I figure that someone is going to be making money from Phillip Morris International, it might as well be me.