How Philip Morris International (PM) Fits into a Short-Term Dividend Capture Strategy

Philip Morris International Inc. (NYSE:PM) is included among the Best High Yield Stocks to Buy in October.

Philip Morris International Inc. (NYSE:PM) is an American tobacco company, with its products sold in over 180 countries. The company maintains an 80% payout ratio, which appears manageable in light of its ongoing business transformation. Smoke-free products— led by IQOS heated tobacco and ZYN nicotine pouches— accounted for 39% of 2024 revenue, with many markets already seeing smoke-free products as the majority. The acquisition of Swedish Match gave Philip Morris a strong foothold in the fastest-growing nicotine segment, while the recent dismissal of a lawsuit over ZYN pricing eliminated a significant concern.

IQOS, Philip Morris International Inc. (NYSE:PM)’s heat-not-burn product, brought in over $3 billion in net revenue and commands a 76% share of the global heat-not-burn market. In Europe, adjusted IQOS sales volumes picked up, climbing 9.1% once regulatory challenges eased, while in Japan, adjusted volumes grew 7.8%, pushing its market share to 31.7%.

On September 19, Philip Morris International Inc. (NYSE:PM) declared an 8.9% hike in its quarterly dividend to $1.47 per share. Through this increase, the company stretched its dividend growth streak to 16 years, which makes it one of the best stocks for a dividend capture strategy. The stock has a dividend yield of 3.57%, as of September 27, and it will go ex-dividend on October 3.

While we acknowledge the potential of PM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.