|
Unlike growth-type companies, high-yield companies don't have to be able to fund a lot of expansion. Still, they need to have finances that are at least healthy enough to support their businesses. Too much debt, for example, can soak up cash flow and reduce a company's options for further financing.
Philip Morris' long-term debt appears to be manageable. Its debt-to-equity ratio of 0.7 at the end of 1999, while higher than the high-yield average, was still lower than that of rival tobacco giant RJ Reynolds RJR. The huge amounts of cash Philip Morris generates make a little extra debt much more palatable. It's also sitting on $5 billion in cash, or about 8% of its total assets.
Next:
How Has the Stock Performed? >>
| 
