We recently published a list of 10 Defensive Dividend Stocks To Buy During Market Sell Off. In this article, we are going to take a look at where Philip Morris International Inc. (NYSE:PM) stands against other defensive dividend stocks to buy during market sell off.
The importance of defensive dividend stocks only becomes clear when the broader market is taking a hit. The S&P is down nearly 8% in a month while Nasdaq has lost over 11.41%. Investors are wondering how to protect themselves from volatility and the answer lies in defensive stocks.
Here is a key distinction investors must understand. Growth stocks rely on price appreciation to generate shareholder returns, something that is hard to achieve when the broader market is facing a severe sell-off. Dividend stocks, on the other hand, became more attractive. They not only help reduce the volatility but as their price goes down, their yield becomes more attractive.
We therefore decided to identify the best stocks for such a scenario. To come up with the list of 10 defensive dividend stocks to buy during a market sell-off, we only considered stocks belonging to the Consumer Defensive sector with a market cap of at least $2 billion and a dividend yield of at least 3%.
A man exhaling smoke from a cigarette indicating the use of tobacco products.
Philip Morris International Inc. (NYSE:PM)
Philip Morris International Inc. (NYSE:PM) is a tobacco company that provides smoke-free products and cigarettes. The company also offers healthcare and wellness products. Its stock offers an attractive dividend yield of 3.56%.
Philip Morris (NYSE:PM) is among the few companies that provide investors with both strong growth and consistent cash flows. The company’s management is focused on generating strong returns for shareholders over the last decade. It offered total returns of 107% to investors in the past five years, compared to the S&P 500’s returns of 101.9%. While this may not seem significant, the peace of mind associated with this investment is worth it.
The company posted a robust performance in FQ424, surpassing expectations with a revenue growth of 7.3% year-over-year. As a result of the solid earnings, the company’s stock surged. Ongoing developments and the attractive guidance for FY2025 make it a rewarding investment opportunity for investors.
Analysts are also optimistic about the company as tobacco and smoking product prices went up by 6.6% in February. Relaxation in some regulations is also seen as a catalyst for sector growth. Analysts believe that the company will benefit from all these favorable circumstances and the next bull run could be around the corner.
Overall, PM ranks 3rd on our list of defensive dividend stocks to buy during market sell off. While we acknowledge the potential of PM as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as PM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
