Stock of the Day

May 28, 2025

Philip Morris International (PM)

$180.39
-$1.98 (-1.1%)
Market Cap: $280.78B

About Philip Morris International

Philip Morris International Inc. operates as a tobacco company working to delivers a smoke-free future and evolving portfolio for the long-term to include products outside of the tobacco and nicotine sector. The company's product portfolio primarily consists of cigarettes and smoke-free products, including heat-not-burn, vapor, and oral nicotine products primarily under the IQOS and ZYN brands; and consumer accessories, such as lighters and matches. It also offers wellness and healthcare products. Philip Morris International Inc. was incorporated in 1987 and is headquartered in Stamford, Connecticut.

Philip Morris International Bull Case

Here are some ways that investors could benefit from investing in Philip Morris International Inc.:

  • The current stock price is around $180.74, reflecting a strong market performance and investor interest.
  • Recent earnings reports show that the company has consistently beaten analysts' expectations, indicating robust financial health and operational efficiency.
  • Analysts have a consensus rating of "Moderate Buy" with multiple firms raising their price targets, suggesting positive future growth potential.
  • The company has a solid dividend yield of approximately 2.99%, providing a steady income stream for investors.
  • Philip Morris International Inc. has shown a year-over-year revenue increase, demonstrating its ability to grow even in a challenging market environment.

Philip Morris International Bear Case

Investors should be bearish about investing in Philip Morris International Inc. for these reasons:

  • The company has a negative return on equity, which may raise concerns about its profitability and efficiency in generating returns for shareholders.
  • Insider ownership is relatively low at 0.13%, which could indicate a lack of confidence from those closest to the company.
  • Despite recent positive earnings, the overall market for tobacco products is facing increasing regulatory scrutiny and health concerns, which could impact future sales.
  • The high price-to-earnings ratio suggests that the stock may be overvalued compared to its earnings, which could pose a risk for new investors.
  • Recent downgrades from some analysts to "hold" ratings indicate mixed sentiments about the stock's short-term performance.

Doubt the Market? 3 Stocks to Rideout Fear, Uncertainty and Doubt

Written By Dan Schmidt on 5/26/2025

 Fear, Uncertainty and Doubt

Lately, the market has been delivering more plot twists to investors than a season of Severance. Solid tech earnings come in tandem with pulled guidance from public-facing companies like airlines and retailers. Economic data points to consumer and job market resilience, yet public sentiment continues to sour, and business surveys show inflation expectations continuing to creep higher.

And of course, erratic tariff policy looms over stocks like a storm cloud, threatening to puncture profit margins across a wide range of companies and sectors. 

The S&P 500 has rallied more than 15% off its April 8 low following President Trump’s reciprocal tariff pause, but uncertainty keeps the February all-time high at arm’s length.

When the future becomes cloudy, the search for growth must be balanced with security. Value investing pioneer Benjamin Graham emphasized the ‘margin of safety’ when picking stocks, which means searching for assets and trading for less than their intrinsic value. 

Searching for Safety Amidst Market Volatility

Investors tend to flock to less volatile assets like blue-chip stocks when the only certainty is more uncertainty. Blue chips often meet Graham’s margin of safety definition through their large market caps, strong sales growth, market dominance, and a history of dividend increases.

Today, we’ll look at three stocks built to ride out a storm of uncertainty.

These stocks were chosen based on fundamental factors like valuation, earnings potential, and dividend strength, along with technical metrics like beta that measure volatility in relation to the broader market. If you remain unconvinced by this recent stock rally, consider these three companies for further inspection.

Philip Morris International: Foundations for a Smoke-free Future

Tobacco companies like Philip Morris International Inc. (NYSE: PM) are often popular stocks in uncertain periods thanks to their generous dividends and minimal volatility; PM fits both categories with a 3% yield and 0.52 beta. However, the firm is also ahead of the pack in future growth plans thanks to its priority on smokeless products.

Philip Morris manufactures the popular ZYN nicotine pouches, along with other smokeless products like IQOS that heat tobacco to create an aerosol instead of burning it to produce smoke.

Smokeless products are seen as a healthier alternative to cigarettes and vaporizers, and PM generated more than 40% of its Q1 2025 revenue from smokeless sources. ZYN was an especially hot seller, with shipments increasing by more than 50% in the quarter. 

The company aims to sell 100% smoke-free products by 2030.

PM shares have jumped to new all-time highs in 2025, posting over 40% year-to-date gains. The valuation is loftier than that of competitors like Altria Group Inc. (NYSE: MO), but PM is better positioned for the smokeless transition ahead, which explains the stock’s outperformance.

PM expects earnings growth of more than 10% over the next 12 months (while MO’s decline), and the dividend payout rate is projected to drop to a manageable 68% in 2026, likely preceding an 18th consecutive annual payout increase.

Cardinal Health: A Bright Light in a Sunless Sector

The healthcare and medical sectors have been lagging behind the broader market for years, but Cardinal Health Inc. (NYSE: CAH) has been one of the few healthcare stocks that have shown strength. The stock punched through a new all-time high in early 2024 and continues to rally, with shares up more than 25% in 2025.

Cardinal Health has a strong dividend with a DPR under 35% and a 29-year track record of payment increases, but the earnings strength is what has investors taking notice.

The company reported fiscal Q3 2025 earnings earlier this month and posted a solid beat. EPS exceeded analyst estimates by 9% and showed year-over-year growth of over 13%.

Revenue slightly missed expectations, but the firm raised full-year 2025 EPS guidance from $7.90 to a $8.05 to $8.15 range. Following the report, analysts at Morgan Stanley and Robert Baird boosted price targets to $166 and $170, which would indicate an upside potential of 9% to 16% from current levels.

Alphabet Inc: Growth at a Value Price

Google-parent Alphabet Inc. (NASDAQ: GOOGL) might not be what investors first envision when thinking of blue chips, but it’s not 2017 anymore, and Alphabet has an enticing valuation to match the growth potential of mega-cap tech. 

The stock trades at less than 20 times earnings, the first time since 2012 that GOOGL shares have traded with a sub-20 P/E. With a beta of 1.01, its volatility is nearly even to the S&P 500, and the company even paid its first dividend last year, indicating future emphasis on rewarding shareholders along with R/D reinvestments.

Alphabet has been the subject of recent DOJ investigations, and comments by Apple’s Eddy Cue about AI replacing traditional search have negatively impacted the stock this month.

However, the company posted strong top and bottom-line earnings on April 25, and the average price target amongst analysts covering the stock is $199, representing potential upside of over 15%.

Strong Earnings and Safe Dividends: An Elixir for Market Uncertainty

Investing in blue chips is a great way to limit downside risk in volatile markets, but it's not a replacement for due diligence or personal risk tolerance analysis. Always research specific companies before buying shares to ensure they fit your investment plan.

Use resources like MarketBeat’s dividend calculator to aid your decision-making, and always consult an advisor before making any changes to your portfolio.  

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