President Donald Trump’s broad new tariffs have rattled investors’ confidence, sparking fears of an economic slowdown and triggering a notable selloff in equities. The move has added more uncertainty to the market, and stocks could remain volatile, at least in the short term.
Yet even in the face of this turbulence, not all stocks are faltering. In fact, a few dividend-paying names are quietly holding their ground and even inching higher. Among them, Philip Morris International (PM) is proving to be surprisingly resilient. While PMI stock may not be entirely insulated from the impact of tariffs, its performance suggests a degree of stability.
What makes this company particularly appealing right now is its reliable dividend payouts and stability. It is a dependable bet for investors looking to ride out macroeconomic uncertainty with steady returns. While headline risk continues to weigh on the broader market, dividend-focused investors may find comfort in PMI. Let’s take a closer look.
Philip Morris Set to Deliver Solid Growth
Philip Morris International has had a notable run in 2025, with its stock rising about 25% year-to-date, including a sharp 7.1% decline on April 4. Over the past five trading sessions, the stock slipped 5.7%, still faring better than the S&P 500 Index, which dropped 11.1% in the same period.
Despite headwinds from a stronger U.S. dollar, which can weigh on its financials, PMI’s growing volumes, strength in the smoke-free products, and effective currency hedging strategies continue to add to its stability. This will enable the company to return significant cash to its shareholders.
In September 2024, PMI raised its quarterly dividend by 3.8%, pushing the annualized payout to $5.40 per share. This marked the 17th consecutive year the company has increased its dividend since going public in 2008. The trend will likely sustain in 2025 as the tobacco giant’s growth story remains intact, reflecting continued momentum in its smoke-free product segment.
Notably, the smoke-free segment now represents nearly 40% of the company’s total net revenues, reflecting strong demand and growing consumer preference. The company’s flagship smoke-free product, IQOS, continues to scale rapidly, benefiting from favorable unit economics, efficient pricing, and expanding market share. This has significantly boosted the company’s profitability. Meanwhile, ZYN, PMI’s fast-growing nicotine pouch brand in the U.S., is further accelerating overall growth in the smoke-free category.
The company continues to invest to broaden its smoke-free portfolio. It plans to offer high-quality, heat-not-burn products across various price points, positioning itself to capture a wider customer base and drive long-term revenue growth.
At the same time, PMI’s traditional tobacco business continues to hold its ground. The combustible segment posted organic revenue growth, driven primarily by its ability to implement higher pricing. With improvements in volume and ongoing cost-cutting initiatives, the segment will likely deliver higher margins, supporting the company's overall profitability.
The combined benefit of a stronger mix of smoke-free products, improvement in the combustible tobacco segment, cost efficiencies, and operating leverage is expected to support PMI’s margins, earnings, and future dividend payouts.
Philip Morris International’s strong cash flow and favorable impact from its balance sheet hedging enable it to reduce its net debt at an accelerated pace. The company will continue strengthening its balance sheet and reducing further debt, enabling it to focus on growth.
The Bottom Line
Philip Morris International is expanding its smoke-free product offerings in the U.S. and around the world. This strategic shift toward the smoke-free segment is expected to drive solid growth in 2025, which could give its stock price and dividend payouts a healthy boost.
Another bright spot is the company’s robust cash flow. It supports continued investment in PMI’s transformation toward a smoke-free future and enables it to return higher cash to its shareholders through dividends and share buybacks.
Wall Street is cautiously optimistic about PMI, with analysts holding a “Moderate Buy” consensus rating on the stock. Moreover, Philip Morris offers a forward dividend yield of 3.59%.
