Royal Dutch Shell plc (ADR) (RDS.B), Philip Morris International Inc. (PM): Fat Dividends for Lean Times

Third, let’s critically consider Philip Morris International Inc. (NYSE:PM). Although I favored the company several years ago, I don’t any longer. Currently, Philip Morris is pricey and its yield could be made much more enticing for a tobacco company. By any objective measurement the stock is expensive. And although it has a good yield its current evaluation and P/E of close to 17 make investing it in a stretch. That being said, let’s apply our x-ray and verify that these assumptions are correct. For the last four years the stock yielded roughly a 10% increase (Q1 2013), a 17% increase (Q1 2012) a 10% increase, a 13% increase (Q1 2011) and a 7% increase (Q1 2010). Therefore, the average rate of increase across years is a healthy 11.8% and payouts have been consistent long-term. Therefore, it may be wise to wait for the right price point and then pounce.

In sum, while none of these stocks are perfect, my selection is Philip Morris International Inc. (NYSE:PM)–but at the right price. The stock combines excellent regular payouts with superior rates of increase year to year, and the company as a whole has excellent growth prospects in the developing world. However, Wall Street is currently bullish on Philip Morris International Inc. (NYSE:PM), so again it might be wise to wait to buy until the price is right. But if I had to make an investment right now, that would be my choice. That being said, at least for the moment, I choose none of the above.

Explore Your Options

This is just a cursory examination! There are even more foreign dividend stocks. While no stock is a sure thing and each carries unique risks, opportunity abounds in both good markets and bad. Be sure to examine your individual investment objectives prior to and during investment. By doing so, you’ll go a long way towards making sound long-term financial decisions, minimizing taxes and fees, and increasing total ROI in the process.

David Mercer is long on PM.The Motley Fool owns shares of Philip Morris International Inc. (NYSE:PM) and Transocean. David is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Fat Dividends for Lean Times originally appeared on Fool.com and is written by David Mercer.

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