First is Philip Morris International Inc. (NYSE:PM) . It’s an attractive company due to its overseas expansion efforts in China. In December 2005, Philip Morris signed an agreement with China National Tobacco Corporation (CNTC).
Soon, Philip Morris International Inc. (NYSE:PM) expanding into Poland and the Czech Republic, among other international locales. Obviously, due to the company’s aggressive expansion efforts, the long-term potential upside is very high for the stock.
The market has priced this into its current price and the stock still has room to grow. Unlike the mature U.S. tobacco market where smoking is on the decline, foreign smokers are gobbling up new consumption opportunities where anti-tobacco efforts are either subdued or non-existent.
While I think each investor needs to take a hard look at themselves before investing a company whose product is often closely linked to lung cancer, with a 3.6% dividend and very healthy margins, Philip Morris International Inc. (NYSE:PM) definitely bears consideration as part of a diversified portfolio.
In addition, another advantage of Philip Morris International Inc. (NYSE:PM) is that it’s an 80/20 company, which means 80% of its operations are overseas — making it essentially an international corporation. This aspect is important, as it allows U.S. investors to capture attractive payouts without paying foreign dividend taxes–an outstanding value.
Classic growth story
Next is Noble Corporation (NYSE:NE). Noble is a classic growth story and is a company with aggressive expansion ambitions. What’s more, the recent litigation surrounding its next-closest competitor Transocean LTD (NYSE:RIG), another Swiss operator, provides a strategic opportunity to invest in a solid company with long-term value potential.
The company offers a rising dividend currently pegged at 1.4%. Also encouraging is that like so many small-caps (at one time), Noble Corporation (NYSE:NE) merged as a potential major player in the offshore drilling micro-sector by filling a niche.
This advantage is provided for by its excellent but small and modern fleet, operating efficiencies, and suburb safety while Transocean experiences significant downtime and equipment failures.
Therefore, given Noble Corporation (NYSE:NE)’s salient (and attractive) aspects (and assets), those who can tolerate its short-term volatility may benefit from a long-term corporate success in the offshore drilling energy sub-sector.
Best in breed
Lastly, Costco Wholesale Corporation (NASDAQ:COST) may be among the best of the retail breed. Unlike Wal-Mart Stores, Inc. (NYSE:WMT), which is arguably a mature player in the service sector, Costco represents a business which is rapidly expanding to fulfill consumer needs with well-priced merchandise amidst a tough economy.
In addition, the business typically offers a lower price point than Wal-Mart, whose prices have actually recently been on the rise. Fortunately for Costco’s shareholders, this value has been accurately priced into the stock, its earnings have soared, and its price has doubled.
I really think Costco’s success in the retail sector can’t be overstated. No business in recent times has created these kinds of headwinds against established retail giants such as Wal-Mart and Target Corporation (NYSE:TGT). In fact, most have done the opposite–closed their doors for good.
And as I always enjoy highlighting that Costco offers a dividend at 1% with continued anticipated growth in the retail sector. Therefore, based upon projected business trends, continuing tough times and positive managerial leadership, Costco represents a true gem for the right investor. In sum, investing in Costco bears serious consideration for the (above-stated) reasons as part of a well diversified portfolio.
Choose carefully
Although the following stocks offer value in the market, each should be approached with caution, and due diligence should be performed prior to, during, and after investing in each of them. While none is the silver bullet to a successful portfolio, some are right for some investors, while separate value exists outside these three companies. By realizing the key difference between speculation and long-term value investing, investors will become better equipped to initiate more attractive strategic positions in the market.
The article Growth Opportunities in a Flat Economy originally appeared on Fool.com.
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