2 Reasons to Buy 5.6% Dividend-Yielding Philip Morris International Stock Today

Core Viewpoint - Philip Morris International presents an attractive investment opportunity due to its strong growth potential in smokeless products and a high dividend yield [1][8]. Group 1: Smokeless Opportunities - The company has successfully grown its combustible cigarette business internationally, achieving a 5.5% organic sales growth in 2023, driven by an 8.9% price increase [2]. - Smokeless products, particularly Zyn and Iqos, are key growth drivers, with Zyn experiencing a 62% volume growth in the U.S. in Q4 2023 [3]. - Iqos has also seen significant growth, ending 2023 with 28.6 million users, an increase of 3.7 million from the previous year [3]. - Zyn's unit economics are six times better than cigarettes, while Iqos has two times better unit economics, contributing over 39% to the company's revenue in Q4 [4]. - The company plans to test Iqos in the U.S. after acquiring rights from Altria, with a test launch in Austin, Texas, pending FDA approval [4][5]. Group 2: Attractive Dividend - Philip Morris International offers a 5.6% dividend yield, having increased its dividend by over 180% since its spin-off from Altria in 2008, reaching $5.20 per share [6]. - The company generated $9.2 billion in operating cash flow in 2023 and expects to produce $10 billion to $11 billion in 2024, indicating strong dividend coverage [6]. - The company aims to reduce its leverage from 3x to 2x by the end of 2026, which may lead to larger dividend increases in the future [7]. Group 3: Stock Valuation - The stock trades at a forward P/E of just over 14x, one of its lowest valuations in recent years, making it an attractive buy given its growth prospects and high dividend yield [10].