Philip Morris International is a "sin stock" that certain investors avoid. But it's really delivering the goods for those willing to own it.For years, Philip Morris International (PM +0.63%) has been a reliably well-performing investment for investors willing to buy in a "sin stock." Although global consumption of traditional cigarettes continues its long, downward spiral, the company has done well developing and selling next-generation alternatives like its Iqos heated tobacco product and the Zyn nicotine ...

Core Insights - Dividend stocks can significantly enhance long-term capital appreciation, with 85% of the S&P 500's cumulative total return from 1960 to 2023 attributed to reinvested dividends [1] Group 1: Importance of Quality in Dividend Stocks - Quality may be more important than yield when selecting dividend stocks, as high-yield stocks often come with increased risk [2] - Investors are encouraged to focus on stocks with a strong track record of earnings and dividend growth consistency rather than just high yields [2] Group 2: Recommended Dividend Stocks - Five high-quality dividend growth stocks recommended for long-term holding include Lowe's, NextEra Energy, Realty Income, Philip Morris International, and United Parcel Service [3] Group 3: Lowe's Companies - Lowe's has raised its dividend for 62 consecutive years, with a current forward dividend yield of 2% [4] - The quarterly payout has increased from $0.28 to $1.20 per share since 2015, representing over 15% annualized growth [6] - The current dividend payout ratio is around 38%, indicating potential for continued aggressive dividend increases [7] Group 4: NextEra Energy - NextEra Energy has raised its dividend for nearly 30 years, currently offering a 2.7% dividend yield [9] - The company's quarterly dividend has nearly tripled since 2015, despite a post-pandemic slump in renewable energy stocks [10] - A recent deal with Google to supply electricity for data centers may bolster long-term growth prospects [10] Group 5: Realty Income - Realty Income has achieved 112 consecutive quarterly dividend increases, equating to 28 years of growth [11] - The stock offers a forward dividend yield of 5.5% and pays dividends monthly, appealing to income-focused investors [12] - Since going public in 1994, Realty Income has generated compound annual total returns of 13.5% and annualized dividend growth of 4.2% [13] Group 6: Philip Morris International - Philip Morris is transitioning towards smoke-free products, which may enhance its future prospects [15] - The company has raised its dividend annually since its 2008 spinoff, currently offering a forward dividend yield of 3.8% [17] Group 7: United Parcel Service - UPS has a forward dividend yield of nearly 7%, but this may indicate dividend uncertainty [18] - The company has a long history of dividend increases, suggesting a commitment to maintaining its dividend growth track record [19] - Cost-saving measures through downsizing and automation could lead to $3.5 billion in annual savings, supporting future dividend security [20]

Core Insights - General Motors (GM) shares surged 15% following better-than-expected third-quarter sales and adjusted profit, marking the best performance in the S&P 500 [3][8] - The automotive giant reduced its forecast on tariff costs, indicating a quicker adjustment to tariffs than anticipated by analysts [3] - GM announced a $1.6 billion loss related to a reevaluation of its electric vehicle strategy due to regulatory changes [3] Company Performance - Halliburton (HAL) exceeded third-quarter revenue and adjusted earnings per share estimates, with shares rising approximately 12% [4] - Warner Bros. Discovery (WBD) shares increased by 11% after announcing a strategic review amid interest from potential buyers [5] - Philip Morris International (PM) reported third-quarter revenue and adjusted EPS above forecasts, yet shares fell 3.8% due to high investment levels [9] - Quest Diagnostics (DGX) shares declined 3.1% despite beating revenue and adjusted EPS forecasts, as the company lowered its full-year guidance for reported EPS [10] Market Trends - Major U.S. equities indexes ended the day mixed, with the S&P 500 little changed, the Dow rising 0.5%, and the Nasdaq retreating 0.2% [2] - Gold prices fell over 5%, impacting shares of Newmont (NEM), which dropped more than 9%, the largest decline among S&P 500 stocks [6][8]

Earnings Overview - Earnings season is gaining momentum with major companies like Tesla, Netflix, General Motors, and Ford reporting results this week [1][3] - As of October 17, 12% of S&P 500 companies have reported, with analysts expecting an 8.5% increase in earnings per share for Q3, marking the ninth consecutive quarter of positive growth but a slowdown from 12% in Q2 [1][2] Company-Specific Highlights - **Netflix**: Stock fell after missing earnings estimates, with operating profit impacted [8] - **Intuitive Surgical**: Beat earnings estimates with strong demand for surgical robots, resulting in a 15% stock increase [9] - **Texas Instruments**: Stock dropped 7% due to a weaker-than-expected Q4 outlook, projecting sales of $4.22 billion to $4.58 billion, below analyst estimates [10][11] - **Capital One**: Reported a 23% increase in net revenue to $15.4 billion, exceeding expectations, with earnings per share at $4.83 [13][14] - **Philip Morris**: Stock fell 8% after reporting a 3.2% decline in cigarette shipments, although smokeless product sales increased by 16.6% [15][16][17] - **3M**: Stock rose less than 1% after raising its annual earnings outlook, reporting Q3 sales of $6.3 billion, slightly above estimates [18][19] - **Halliburton**: Revenue increased despite falling oil prices, with adjusted earnings of $0.58 per share beating estimates [20][21] - **GE Aerospace**: Stock rose over 2.5% after reporting a 26% revenue increase to $11.3 billion and raising full-year guidance [23][24] - **Northrop Grumman**: Raised its 2025 profit forecast due to increased demand from geopolitical conflicts [28] - **Elevance**: Stock rose 6% after beating quarterly profit estimates [29] Market Trends - Bank of America noted that 76% of S&P 500 companies reporting so far have exceeded earnings expectations, higher than the average of 68% [36][37] - The upcoming week will see a significant number of companies reporting, with 44% of S&P 500 companies expected to release earnings [38]

Philip Morris nudged up the bottom end of its outlook for this fiscal year off the back of strong demand for its smoke-free products, including Zyn nicotine pouches https://t.co/g5cJBNgyCv ...

Core Viewpoint - The article emphasizes the importance of conservative dividend-paying stocks for older investors, highlighting Philip Morris International, PepsiCo, and Enterprise Products Partners as reliable options for generating steady long-term income [1][2]. Group 1: Philip Morris International - Philip Morris International (PMI) is one of the largest tobacco companies, spun off from Altria in 2008, focusing on international markets with higher smoking rates [3]. - Despite declining global smoking rates, PMI's stock has increased nearly 210% since its public debut, with a total return of 608% including reinvested dividends [4]. - PMI has offset declining traditional cigarette shipments by raising prices, cutting costs, and expanding its smoke-free product portfolio, which accounted for 41% of revenue and 42% of gross profit in the latest quarter [5]. - Analysts project PMI's earnings per share (EPS) to grow at a compound annual growth rate (CAGR) of 26% from 2024 to 2027, with a forward dividend yield of 3.7% [6]. Group 2: PepsiCo - PepsiCo is a leading beverage and packaged food company, recognized as a Dividend King with 53 consecutive years of dividend increases, currently offering a forward yield of 3.8% [7]. - The company has adapted to health trends by expanding its beverage portfolio with healthier options and updating its packaged food brands [8]. - Over the past decade, PepsiCo's stock has risen 55%, generating a total return of nearly 110%, with analysts expecting an EPS CAGR of nearly 8% from 2024 to 2027 [9]. Group 3: Enterprise Products Partners - Enterprise Products Partners operates over 50,000 miles of pipeline, generating revenue by charging fees to upstream and downstream companies, insulating it from commodity price volatility [10][11]. - As a master limited partnership (MLP), it offers tax advantages and has consistently raised distributions for 28 years, currently providing a high forward yield of 7.2% [12]. - Analysts expect its earnings per unit (EPU) to grow at a steady CAGR of 4% from 2024 to 2027, with the stock appearing attractive at 11 times next year's EPU [13].

Financial Performance - Philip Morris lifts its full-year profit guidance [1] Product Performance - US sales of Zyn nicotine pouches continued to accelerate [1] - US sales of IQOS heated tobacco sticks continued to accelerate [1]

Group 1: Investment Activity of Duquesne Family Office - Duquesne Family Office, led by billionaire Stanley Druckenmiller, has exited its entire stake in Palantir Technologies, a high-flying AI stock, and shifted focus to Philip Morris International, a high-yield dividend stock [6][15] - Druckenmiller sold a 769,965-share stake in Palantir between March 2024 and March 2025, marking a significant move as the firm has exited 55 positions over the past year [7][5] - The firm has built a 1,105,268-share position in Philip Morris International, which has doubled in value over the last 15 months, making it one of Duquesne's largest holdings [17][16] Group 2: Performance and Valuation of Palantir Technologies - Palantir's stock has surged nearly 2,000% since the beginning of 2023, driven by sustained sales growth of 25% to 35% and strong operating cash flow [8][9] - Druckenmiller's decision to sell Palantir may reflect concerns over an overhyped AI market and the potential for a bubble, as historical trends suggest that such bubbles often burst early in their expansion [10][11] - Palantir's valuation is considered indefensible, with a trailing-12-month price-to-sales ratio of 107, significantly higher than other leading tech companies [12][13] Group 3: Philip Morris International's Growth and Strategy - Philip Morris International is transitioning from traditional tobacco products to smoke-free solutions, with significant growth in its IQOS heated tobacco system and Zyn nicotine pouches [20][21] - The company operates in approximately 180 countries, allowing it to maintain demand in emerging markets despite regulatory challenges in developed countries [18][16] - Philip Morris offers a solid annual dividend of $5.40 per share, yielding 3%, which is more than double the average yield of S&P 500 companies, contributing to its attractiveness as an investment [22]

Core Viewpoint - The consumer staples sector is demonstrating resilience amid a broader market downturn, outperforming the S&P 500 and breaking through previous resistance levels [1][2]. Group 1: Market Performance - The S&P 500 ETF has declined nearly 3% in a week, with most sectors following this downward trend due to rising economic uncertainty [1]. - The Consumer Staples Select Sector SPDR Fund (XLP) has outperformed the broader market, showcasing its defensive nature during turbulent times [2][3]. Group 2: Sector Characteristics - Consumer staples include essential goods such as food, beverages, household items, and personal care products, which maintain steady demand regardless of economic conditions [2]. - This sector is considered a "defensive" investment, providing consistent revenue and earnings, especially when growth stocks falter [3][4]. Group 3: Investment Opportunities - The XLP ETF offers diversified exposure to the consumer staples sector with a low expense ratio of 0.09% and a dividend yield of 2.2%, making it a cost-effective choice for long-term investors [6]. - Costco Wholesale, as XLP's largest holding, has seen its stock rise over 43% in the past year, with a projected EPS of $4.09 for its upcoming earnings report [8][9]. - Philip Morris International has surged 72% over the past year, with a robust dividend yield of 3.43% and strong earnings guidance for 2025, driven by a significant increase in oral product shipments [10][11].