5 Best Tobacco and Cigarette Stocks To Buy

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

Number of Hedge Fund Holders: 63

Philip Morris International Inc. (NYSE:PM) is one of the premier tobacco stocks to invest in. The company’s portfolio includes cigarettes and smoke-free products like heat-not-burn, vapor, and oral nicotine products. On December 8, Philip Morris International Inc. (NYSE:PM) declared a $1.27 per share quarterly dividend, in line with previous. The dividend is payable on January 11, 2023 to shareholders of record on December 22. The dividend yield on December 15 came in at 4.96%. 

On December 15, Citi analyst Simon Hales resumed coverage of Philip Morris International Inc. (NYSE:PM) with a Neutral rating and a $109 price target after the company concluded the acquisition of Swedish Match. The analyst believes Philip Morris International Inc. (NYSE:PM) will be able to leverage Swedish Match’s route-to-market in the U.S. to roll-out its IQOS products. However, the potential exit from Russia will pressure the company’s headline earnings in 2023 and its pro-forma valuations are at five-year P/E relative highs, the analyst told investors in a research note.

According to Insider Monkey’s data, 63 hedge funds reported owning stakes in Philip Morris International Inc. (NYSE:PM) at the end of Q3 2022, compared to 56 funds in the prior quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 17.4 million shares worth $1.4 billion. 

Here is what Coho Relative Value Equity Fund has to say about Philip Morris International Inc. (NYSE:PM) in its Q3 2022 investor letter:

“Coho is not immune to the earnings pressure exerted by a strong USD, although the portfolio on the whole has modestly less foreign revenue exposure relative to the S&P 500 Index. The two most impacted Coho stocks includes Philip Morris International, which essentially derives all of its revenues outside the U.S. Harkening back to Table 1, the decline in Philip Morris earnings for 2022 versus the reported earnings in 2021 is entirely related to the strengthening dollar. On a constant currency basis, Philip Morris’ earnings in 2022 would be up mid to high single digits.”

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