Philip Morris International Inc (PM)
Official siteCONSUMER DEFENSIVE • TOBACCO • NYSE
Market Cap: $299.08B
Last updated: Sep 01, 2026 at 10:00 AM ET
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British American Tobacco: The Price Already Assumes Decline
Current reconciled price $57.65 implies reverse-DCF unlevered cash CAGR of -0.9% at 8.5% WACC, 3% terminal, rising to +2.9% requirement at a 9.5% WACC New Categories grew 18.0% CC, GBP1,928m of GBP12,235m group revenue (15.8%); modern oral +65.9% revenue growth, 39.2% volume share, contribution GBP257m Restructuring touches ~9,000 roles, targets GBP600m annualized savings by 2028 (GBP500m by 2027); management cuts net finance costs to ~GBP1.65bn and has a GBP1.3bn buyback (~1.4% market value) Material regional divergence - Americas revenue +8.5% and adj op profit +10.1%, Asia-Pacific, Middle East & Africa revenue -6.3% and adj profit -16.5% - APACMEA is the softest risk Blended fair value $68.07 (internal DCF $77.10, mature multiple $65, Greenwald EPV $45.52) implies 15.3% margin of safety; 11.68x on 2028 $5.63 EPS yields ~$65.80, ~11-12% p.a.
Altria: What Income Investors Need To Know About This Legendary Dividend Machine (And Why I'm Not Buying It Personally)
Altria is the best performing stock in history, turning $1 into $2.7 million over 100 years ($143K adjusted for inflation). BUT "Past performance is no guarantee of future results." PM started working on iQOS is 2008 (the spin-off year). BTI is the world leader in vaping (though struggling with non-approved mods) and MO? It's RRP guidance is very disappointing. Management says its goal is 10% RRP revenue in 2028...33% lower than BTI's 2025 levels. PM is on track for 66% by 2030, so roughly 6X better than MO's target in 2028. MO's volume declines have accelerated to 11%, crushed by 10% to 11% price hikes and consumers who are inflation-scarred (not to mention FDA regulations that keep tightening). MO is NOT participating in heat sticks (the growth engine of nicotine) and its vaping brands are FDA approved (and vapers don't use them). Owning 20% of BUD isn't as helpful given that 46% of Americans don't drink. Even Cannabis is something that likely won't help MO (since older smokers don't smoke weed and cannabis users don't like big tobacco). Altria has never posted negative earnings growth (at least not for 20 years but I think ever). But in 2028 it's expected to post its first negative growth year (due to 11% volume declines being almost insurmountable). While 10% total returns are possible in the future, the risk of negative growth leading to a PE compression to 7.5, indicates a potential -5% CAGR inflation-adjusted 3 year return. BTI and PM are better alternatives.
British American Tobacco: What Investors Need To Know (Another Potential Ultra ZEUS V2 Candidate)
British American Tobacco is the #2 global tobacco company, including in the all important reduced risk product segments. BTI is catching up to PM in terms of heat sticks, nicotine pouches and vaping, though it has experienced some success in Asia and Easter europe on those fronts. BTI's US RRP sales are struggling with the FDA not enforcing non-approved vaping mods and e-liquids. Management is trying to get the FDA to crack down. FCF/share growth through 2028 is expected to be 7.8%, though long-term growth of 4% to 6% is what management is guiding for (and the growth since 2011). BTI's dividend safety is impeccable thanks to the lowest payout ratio (65%), steadily falling leverage (2.7 and on its way to 2.3X in 2027 vs 3 safe), and a solid BBB+ credit rating and 25 year dividend growth streak. PEGY analysis indicates the stock is priced for 4.5% growth (the historical norm) BUT with 7.8% growth actually expected, a PEGY discount of 42% potentially creates around 80% total return potential in 2026. Morningstar's fair value assumes 12.5 PE (the historical median) with analyst consensus 14X and the PEGY indicating that if BTI keeps growing at 8% it's worth 20X. 12% to 13% CAGR total return is the base-case outlook for the next 5 years (about 1% higher than PM) and for a 3+ year portfolio adding BTI to a PM containing portfolio (like Ultra ZEUS V2) is a good idea.
Philip Morris International: The Nvidia of Tobacco Dividend Aristocrats is A Buffett-Style "Wonderful Company At A Fair Price" And Is Joining Ultra ZEUS Soon
Since the Ultra ZEUS portfolio supports 17 family members and GNG (until we break even) I am always laser focused on making it better. While researching the tobacco dividend aristocrats to see whether any of them is compelling enough to add to the portfolio I was VERY impressed with Philip Morris's overall investment thesis. It's already at 41% of sales from reduced risk products (66% by 2030) PM is on track for a smoke-free future. They are the growth leader in the nicotine market (which is growing about 5% per year). The A-credit rating, and industry leading RRP brands in heat sticks and nicotine oral pouches means has created the lowest volatility (0.42 beta) tobacco aristocrat. While the PE appears to be higher than normal (by 24%) actually its PEGY of 2.4 vs a 2.66 14-year median indicates that PM is reasonably priced (Morningstar and analysts agree a 21X to 22X PE is fair value). PM's 10% growth through 2030 is the best in the industry and 2X its 10-year growth CAGR, indicating that 11% to 12% CAGR total returns are justified over the next 1 to 5 years. For anyone looking for a VERY low volatility A-rated dividend aristocrat with a 3.4% yield (SCHD like but with 66% better growth) PM makes for an excellent Buffett-like "Wonderful company at a fair price". Adding PM to Ultra ZEUS allows 5% higher upside capture in an up month for stocks, but a 10% better downside capture ratio in a down month, With 3% better long-term return potential (28% vs 25% CAGR)
What Income Investors Need To Know About Tobacco: Part 1
Tobacco is the best performing industry in history, largely because of its defensive (and addictive) nature. The good news is that global nicotine (ex-China) is growing 4% to 5% per year, faster than the global economy (people love their vices😉) The bad news is that not all tobacco companies will be able to take advantage of the transition to a tobacco free future (US smokes now cost $10 per pack and in Australia as much as $33). This is part 1 of a multi-part report looking at the 3 "big nicotine" dividend aristocrats, including which ones I might add to the Ultra ZEUS fund this year. The basic summary (seen in the table) is that PM is the growth leader (40% smoke-free sales), BTI is well on track for its 4% to 6% long-term guidance, and MO is OK...for now.
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Frequently Asked Questions About PM
- What is PM's current dividend yield?
- Philip Morris International Inc (PM) has a current dividend yield of 3.14%.
- Does PM pay dividends?
- Yes, Philip Morris International Inc pays dividends with a current yield of 3.14%.
- What is PM's P/E ratio?
- Philip Morris International Inc has a price-to-earnings (P/E) ratio of 23.15.
- What is PM's market cap?
- Philip Morris International Inc (PM) has a market capitalization of $299.08B with a current stock price of $187.49.
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