PMI(US:PM) The Motley Foolยท2025-01-28 02:41Core Viewpoint - The current stock market is heavily focused on artificial intelligence, semiconductors, and cryptocurrency, suggesting a need for diversification in investment portfolios [1] Company Overview - Philip Morris International (PM) is a global leader in the nicotine market, with a dividend yield exceeding 4% and a strong balance sheet, positioning it for double-digit earnings per share (EPS) growth in the future [3][10] Market Position - Philip Morris International has a diverse portfolio of cigarette brands, including Marlboro and Chesterfield, and operates in nearly every country except China and the U.S. [4] - The company experienced a 1.3% year-over-year growth in cigarette volumes last quarter, contrasting with Altria Group's 8.6% decline [5] New Product Development - The company has invested significantly in the new-age nicotine market, acquiring leading products like the IQOS heat-not-burn device and Zyn nicotine pouches [6] - Smoke-free revenue grew by 16.8% year-over-year, now accounting for 38% of total revenue, indicating a strong growth trajectory for these products [7] Revenue Growth - Overall revenue for Philip Morris International increased by 11% year-over-year, despite a supply shortage of Zyn nicotine pouches, which affected market share [8] - Management anticipates that resolving the Zyn supply shortage will lead to accelerated revenue growth [9] Dividend and Cash Flow - The company currently pays a dividend of $5.25 per share, supported by $6.46 in free cash flow per share, indicating sustainable dividend growth potential [10] - Expectations for increasing free cash flow suggest that the company will have more capacity to raise dividends in the future, enhancing investor income [11] Investment Recommendation - With a strong market position in safer nicotine products and a solid dividend yield, Philip Morris International is recommended as a long-term investment during the transition from traditional cigarettes [12]