15 Best Stocks For Dividends

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

Number of Hedge Fund Holders: 64

Philip Morris International Inc. (NYSE:PM) is an American multinational tobacco company that offers a wide range of related products to its consumers all over the world. The company has been a top performer among its peers over the past decade. Its shift towards a smoke-free future and the evolution of its product portfolio has enabled it to stay ahead of the global decline in smoking. Year-to-date, the stock is up by nearly 10%.

In the first quarter of 2024, Philip Morris International Inc. (NYSE:PM) maintained strong momentum in its smoke-free initiatives, with rapid underlying volume growth and accelerating organic net revenue and gross profit increases The company’s smoke-free business (SFB) represented 39% of its total revenue in the quarter. The progress toward becoming a smoke-free company is evident in various regions, where these products accounted for nearly two-thirds of revenue, driven by Japan and Korea. This segment continues to achieve outstanding top-line growth, with net revenues rising by 21.1% and gross profit increasing by 31.8%. In FY24, the company expects to generate an operating cash flow between $10 billion to $11 billion.

Philip Morris International Inc. (NYSE:PM) underperforms on metrics like dividend yield and valuation when compared to its competitor, British American Tobacco (BTI). BTI offers a dividend yield of 11.39% and trades at a forward price-to-earnings ratio of just 7.40. In contrast, PM provides a 4.9% dividend yield and has a forward price-to-earnings ratio of 16.9. Clearly, BTI is much cheaper and offers over double the dividend yield compared to PM. That said, Philip Morris International Inc. (NYSE:PM) appears to be the better stock to own. It is performing well across its businesses, outpacing the competition, and is significantly ahead of its peers in transitioning to smoke-free products. In the past five years, BTI has declined by over 16%, whereas PM delivered an 18.4% return to shareholders.

On June 7, Philip Morris International Inc. (NYSE:PM) declared a quarterly dividend of $1.30 per share, which fell in line with its previous dividend. The company holds a 14-year track record of consistent dividend growth, which makes it one of the best stocks for dividends.

According to Insider Monkey’s database of Q1 2024, 64 hedge funds held stakes in Philip Morris International Inc. (NYSE:PM), down from 68 in the previous quarter. These stakes are worth over $6.5 billion collectively. With nearly 15 million shares, Fundsmith LLP was the company’s leading stakeholder in Q1.