Core Insights - Philip Morris International (PMI) has shown significant stock performance, with a 68% increase over the past two years and a 22% rise year-to-date, indicating strong investor interest despite regulatory challenges in the tobacco industry [1][2][4] - The company is transitioning towards a smoke-free future, focusing on innovative products like iQOS and ZYN, which are gaining traction in the market [5][12][21] - PMI has a strong dividend history, raising dividends for 18 consecutive years, with a recent increase of nearly 9%, resulting in a yield close to 4% [9][10][22] Stock Performance - PM stock has surged 68% over the past two years and 12% in the last 52 weeks, with a year-to-date increase of about 22% [1][2] - The stock is currently trading at 20.9 times forward adjusted earnings, reflecting a premium investors are willing to pay for its transition to smoke-free products [8] - Despite a recent dip of 10% in the stock price, analysts view this as a potential buying opportunity, with several maintaining "Buy" ratings and optimistic price targets [6][17][20] Financial Performance - PMI reported Q3 revenue of $10.8 billion, a 9.4% year-over-year increase, driven by strong pricing in combustible tobacco and growth in smoke-free products [11][12] - Adjusted EPS for Q3 was $2.24, up 17.3% annually, exceeding expectations due to record smoke-free profits [11] - The company has a payout ratio of 74.7%, indicating a commitment to returning cash to investors [10] Future Outlook - For 2025, adjusted EPS is forecasted between $7.46 and $7.56, suggesting growth of 13.5% to 15.1%, with total product volume expected to rise by about 1% [14][16] - Organic revenue growth is projected between 6% and 8%, with capital expenditures focused on smoke-free innovations [15] - Analysts expect continued growth in smoke-free product revenues, with a strong market presence anticipated for iQOS and ZYN [19][20] Market Position - PMI is one of the largest tobacco companies globally, with a market capitalization of approximately $244.2 billion and a workforce of over 83,000 [3] - The company is navigating regulatory pressures and declining smoking rates by investing in smoke-free alternatives, which are now 41% of total sales [12][21] - The stock has a consensus "Moderate Buy" rating, reflecting confidence in PMI's resilience and long-term growth potential [20][22]

Core Insights - The article highlights the performance of dividend-paying stocks during market downturns, emphasizing their stability and ability to outperform the S&P 500 in 2025 [1][2] Group 1: AT&T - AT&T is a major U.S. telecom provider with 72.7 million post-paid phone subscribers and 9.3 million fiber optic broadband customers as of the end of 2024 [3] - The stock has a low beta of 0.42, indicating less volatility during market downturns, and offers a dividend yield of 4.1%, which is sustainable as it represents only half of the company's earnings-per-share estimate for 2025 [4] Group 2: Philip Morris International - Philip Morris is the largest tobacco company globally, selling products in 180 countries, and has a beta of 0.44, making it a reliable investment during economic downturns [5] - The company has consistently paid and raised its dividend since 2008, currently yielding 3.2%, and smoke-free products now account for 40% of total sales, indicating a shift towards long-term growth [6] Group 3: The Coca-Cola Company - Coca-Cola is a well-established blue-chip dividend stock with a diverse portfolio of beverages and a low beta of 0.45, making it a stable investment choice [7][8] - The company has a dividend yield of 2.8% and a payout ratio of 69% of 2025 earnings estimates, with a strong track record of increasing dividends over six decades [9]