15 Best Stocks to Buy During Recession

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

Number of Hedge Fund Holders: 102

Philip Morris International Inc. (NYSE:PM) operates as a tobacco company. Barclays analyst Gaurav Jain remains optimistic about the company’s stock as the firm opines that tobacco remains in the early innings of a generational shift towards nicotine investing. The firm expects a breakout year for tobacco stocks. Fitch Ratings revised the outlook on the company to “stable” from “negative” in March 2025, demonstrating Philip Morris International Inc. (NYSE:PM)’s meaningful progress in deleveraging toward its target of 2.0x net debt/ EBITDA by 2026 and cash flow generation recovery in 2024. The firm also noted its leading size in the global tobacco sector and its robust product, brand, and geographical diversification.

As of December 31, 2024, Philip Morris International Inc. (NYSE:PM)’s smoke-free products were available for sale in 95 markets, and it estimates that they were used by 38.6 million adults around the world. Philip Morris International Inc. (NYSE:PM)’s smoke-free business accounted for 42% of its Q1 2025 total net revenues. Andvari Associates, an investment management firm, released its Q1 2025 investor letter. Here is what the fund said:

“Last year, Andvari made its first investments in tobacco companies with the purchase of Philip Morris International Inc. (NYSE:PM) and Altria. At the time of our purchase, Philip Morris and Altria had underperformed the S&P 500 over the prior 5- and 10-year periods. Both traded at low valuations and with high dividend yields. But thanks to following the industry o and on for 10+ years, and thanks to many discussions with long-time shareholders of the companies, Andvari felt the time was right to make the plunge. The timing could not have been much better for us as both companies have so far contributed positively to Andvari’s recent overall performance.

The problem—or the feature, depending on your perspective—with the tobacco industry has been a declining population of cigarette smokers in developed countries. Over the last four or five years, the decline in these smoking populations has accelerated, which in part explains the poor share performance of the tobacco companies between 2017 and 2023. Despite this, the tobacco companies have maintained, or slowly increased, their revenues and profits with regular price increases on cigarettes…” (Click here to read the full text)