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Philip Morris International

Philip Morris NYSE:PMDividend Yield: 3.5%

While there’s no garbage or gardening involved, Philip Morris International‘s (NYSE:PM) products still are a little smelly. Tobacco products can indeed stink up your clothes and hair, even yellow your teeth … but if you’re familiar with the dividend power of tobacco stocks, chances are you’re cool with letting all that slide.

Phillip Morris is the world’s largest tobacco company and sports an addictive 3.5% yield. The company has been making payments since its 2008 spin-off from Altria (NYSE:MO) and has already increased its quarterly payout nearly 70% in that time!

Of course, with stocks like Altria and Lorillard (NYSE:LO) boasting superior yields around 5%, why saddle up with Philip Morris? Growth potential.

PM shares have gained more than 80% since splitting from Altria, beating the rest of its American brethren, and has put up 11 consecutive quarters of earnings growth. And that should continue. While there are questions about the future of cigarettes and other tobacco products because of government regulation and increased awareness of linked health problems, Phillip Morris has a few advantages that offset such uncertainty.

To start, it’s working on adding “lower-risk” cigarettes in the next few years in response to health concerns. And it’s an international business; thus, while the U.S. is cracking down on the industry, Philip Morris still can peddle its wares to less regulated countries across the world. That should help shares keep from just moving sideways, and help PM grow its already attractive dividend.

Article printed from InvestorPlace Media,

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