1 Reason To Avoid Philip Morris (PM) And Its 6.7% Dividend

With new cases of the coronavirus spiking in the US and worldwide .

With the already historic unemployment levels and job losses in recent months .

With massive uncertainty in hospitalsbanks, and other industries.

And with many Blue Chip stocks looking vulnerable when they’re supposed to be among the best areas to invest your capital.

There are few safe places to invest today. And this number grows smaller every day this crisis lasts.

The key to continue compounding your investments and build wealth is to keep investing well over time.

This is a huge part of things.

But another huge part of this that few think of is also losing as little capital as possible.

The fewer investment losses you have the more capital you keep. And the more capital you keep the faster you achieve your retirement goals.

To help you avoid bad investments, in recent articles I’ve shown you several stocks to avoid buying…

Today I want to show you another stock to avoid at all costs so you can continue growing your investment portfolio.

1 Reason To Avoid Philip Morris

It’s Got A Lot of Debt

Normally in these articles I talk about things like valuation, profitability, cash flow, the affects coronavirus is having on a company’s financials, among other things.

But frankly none of those matter with Philip Morris (PM) due to its large debt load.

As of this writing PM is a $115.9 billion market cap company.  It manufactures and sells cigarettes and other nicotine products like smokeless tobacco outside the United States.

Its most recent quarterly data showed it has $4.8 billion in cash.  While it has $29.5 billion in short term and long-term debt and capital leases.

It’s debt to equity ratio is unreadable because it has more total liabilities than total assets.

This is rare when you see it, but it’s bad.


Because PM has a negative $10.3 billion in shareholders equity – the equity part of the debt/equity ratio – means its balance sheet has a negative value.

This is a drag on the total value of the company and its stock.  And makes the stock riskier as well.

To illustrate this, total liabilities are 132.4% of the value of its balance sheet.

With all the craziness going on, I need to invest – and recommend to you – stocks that will be around for decades to help build wealth over the long term.

Typically, this means I invest in companies that have little to no debt compared to their cash and equity.

Philip Morris’ large amount of debt makes it too risky for me to recommend.  Even though it will continue performing well during and after this pandemic.

And even though it pays a 6.7% dividend as of this writing.

Because of its huge debt, I recommend you avoid its stock to keep your retirement portfolio safe.

Plus, I’ve already found many other better, safer, and potentially higher return investments for you…

Click here to see some of the stocks we recommend to Depression Proof Your Portfolio.

Disclosure – Jason Rivera is a 13+ year veteran value investor who now spends much of his time helping other investors earn higher than average investment returns safely. He does not have any holdings in any securities mentioned above and the article expresses his own opinions. He has no business relationship with any company mentioned above.

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