This High-Yield Tobacco Stock Just Raised Its Dividend by 8.8%

This High-Yield Tobacco Stock Just Raised Its Dividend by 8.8%

• PM
• XLP

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Philip Morris International (PM) just gave income investors another reason to pay attention. The tobacco company announced last week that it raised its quarterly dividend by 8.8%, from $1.47 to $1.60 per share. That brings the annual payout to $6.40 per share. Shareholders on record by Oct. 2 will receive the payment on Oct. 26, 2026.

The stock has also been doing well. PM stock is up 17% year-to-date (YTD), a little over twice the 8% gain in the Consumer Staples Select Sector SPDR Fund (XLP). It also reached a 52-week high of $207.76 in late July.

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This dividend increase is not only about cigarette sales. Philip Morris International is building its smoke-free business, and the regulatory wins are adding support. The FDA authorized 11 ZYN ULTRA nicotine pouch products in August. Weeks earlier, it gave 20 flagship ZYN products the first modified-risk orders issued for nicotine pouches, allowing Philip Morris International to market them as lower-risk alternatives to cigarettes.

With the dividend nearly 9% higher and smoke-free products gaining ground, can Philip Morris International's stock keep moving higher? Let's find out.

The Numbers Behind Its Dividend Strength

Philip Morris International sells cigarettes, but its business is increasingly tied to smoke-free products such as IQOS heated-tobacco devices and ZYN nicotine pouches. The company operates mainly outside the U.S. cigarette market, where Altria Group (MO) is the bigger name.

PM stock has gained 16% over the past 52 weeks and 17% so far in 2026.

It now trades at 22.2x forward earnings, above the consumer staples sector average of 14.6x, so investors are paying more for its growth and dividend record.

Philip Morris International raised its quarterly dividend by 8.8%, from $1.47 to $1.60 per share. That brings the annual payout to $6.40 per share. The payment is due on Oct. 26 for shareholders on record as of Oct. 2, which is also the ex-dividend date.

Before the raise, the stock yielded 3.12%, compared with the consumer staples average of 1.89%, and its forward payout ratio was 72.4%. The company has raised its dividend for 19 straight years since becoming a public company in 2008. Since then, the payout has increased 248%, for a 7.2% compound annual growth rate.

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