Philip Morris International Inc. (PM): investment thesis checklist
What a value investor writing down why they own Philip Morris International Inc. would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on invested capital: 34.4% in FY2025; between 26.1% and 73.5% over 7 filed years, median 34.4%. Does the thesis need it to stay inside that range?
- Free cash flow yield: 4.3% in FY2025; between 4.3% and 7.8% over 10 filed years, median 6.0%. Does the thesis need it to stay inside that range?
- EV to EBIT: 19.79x in FY2025; between 13.20x and 19.79x over 7 filed years, median 16.14x. Does the thesis need it to stay inside that range?
- Price to earnings: 22.09x in FY2025; between 13.14x and 27.23x over 10 filed years, median 18.60x. Does the thesis need it to stay inside that range?
- Gross margin: 67.1% in FY2025; between 23.1% and 68.1% over 10 filed years, median 64.4%. Does the thesis need it to stay inside that range?
- Operating margin: 36.6% in FY2025; between 14.6% and 41.3% over 10 filed years, median 36.0%. Does the thesis need it to stay inside that range?
- Net debt to EBITDA: 2.65x in FY2025; between 1.71x and 3.52x over 7 filed years, median 2.65x. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 7.2% in FY2025; between -16.5% and 20.0% over 10 filed years, median 2.4%. Does the thesis need it to stay inside that range?
- Share count change: 0.1% in FY2025; between -0.5% and 0.2% over 10 filed years, median 0.1%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from Philip Morris International Inc.'s own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Revenue Growth 1Y stays at or above 0%
Today 7.31%. Replayed over 9 filed years, it would have broken in 2; most recently FY2020, at -3.73% (10-K, filed 2021-02-09).
Return on Invested Capital stays at or above 27.5%
Today 34.37%. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
Dividend Rate stays at or above $6.33
Today $6.40. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
3. What would break it
- A filed year in which revenue growth 1y fell below 0%.
- A filed year in which return on invested capital fell below 27.5%.
- A filed year in which dividend rate fell below $6.33.
4. The published tests it meets today
Of 30 tests value investors published: 2 met, 19 not met, 9 we could not complete. Counts, never a score.
Meets: ROIC at or above WACC; High return on tangibles.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.