10 Best Counter Cyclical and Defensive Stocks to Invest In

5. Philip Morris International Inc. (NYSE:PM)

Market Capitalization as of September 11: $193.54 Billion

Number of Hedge Fund Investors in Q2 2024: 70

Philip Morris International Inc. (NYSE:PM) is arguably a top consumer defensive stock amid the transition to a smoke-free future. The company’s edge as one of the best defensive stocks to invest in stems from offering products that are outside the tobacco and nicotine sector. Its product portfolio includes cigarettes and smoke-free products.

The firm is moving forward with its business change amidst an increase in consumer awareness about health and strict rules aimed at discouraging smoking. Even though the number of cigarettes sold in the U.S. is going down, Philip Morris International still sees strong interest from around the world because of more people being born and a wider acceptance of smoking in different cultures.

The manufacturer of Marlboro cigarettes and the IQOS tobacco heating device announced adjusted earnings per share (EPS) for the second quarter of $1.59, with income increasing by 9.6% compared to the previous year, reaching $9.47 billion.

Philip Morris International Inc. (NYSE:PM) saw a significant rise in the sales of its tobacco-free products, with sales climbing by 23.5% to 243.8 million cans. The sales of nicotine pouches also experienced a remarkable increase of 50.6% to 149.9 million cans, driven by the success of its Zen brand, which saw a 50.3% increase in the number of cans it delivered.

Philip Morris International Inc. (NYSE:PM) is also putting a lot of money into alternatives to smoking, like ZYN nicotine pouches, which made up roughly 38% of its total earnings in the first six months of 2024. To keep up with increasing demand, the company has put $232 million into its Owensboro, Kentucky production plant, which is anticipated to create about 450 direct new positions and bring in around $277 million in yearly economic benefits for the area.

In addition to the robust growth and expansion in pursuit of growth opportunities, it remains one of the best stocks to invest in owing to its attractive dividend yield of 4.10% while trading at a price-to-earnings multiple of 18.

By the end of Q2, 70 hedge funds held shares in Philip Morris International Inc. (NYSE:PM), with total stakes amounting to $9.54 billion. As of June 30, the largest shareholder was GQG Partners, managed by Rajiv Jain, with a position worth $3.67 billion.