Chris Lange
5 min read
Quick Read
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Altria (MO) yields about 6%, nearly double Philip Morris’s (PM) 3%, with both dividends covered at roughly 78% of earnings guidance.
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Philip Morris targets annual EPS growth of 9 to 11 percent through 2028, with smoke-free products already exceeding 40% of net revenue across 110 markets.
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Altria (NYSE:MO) or Philip Morris International (NYSE:PM): which tobacco stock makes more sense for a retirement portfolio right now? Both companies beat third-quarter estimates, raised their dividends, and climbed sharply this year. Altria is up 37.87% year to date, and Philip Morris is up 31.41%. The choice comes down to a high-yield U.S. cash source against a lower-yield international compounder. They differ across income, growth, and valuation.
Income: Altria Pays Nearly Twice the Yield
Altria raised its dividend 4.7% in August to an annualized $4.44 per share. That was its 61st dividend increase in 57 years. At $75.82, the forward yield comes in at about 5.86%. Philip Morris raised its payout 8.8% to $6.40 annualized, its 19th consecutive annual increase. At $205.45, though, it yields only about 3.12%.
A similar margin covers each payout. Altria’s dividend equals roughly 78% of the low end of its raised 2026 adjusted EPS guidance of $5.66 to $5.74. Philip Morris pays out about 77% of the bottom of its $8.29 to $8.44 range. Altria has less leverage, with debt at 1.9x EBITDA. Philip Morris carries 2.17x net debt to adjusted EBITDA. Altria also added a $1B buyback expansion, while Philip Morris plans no buybacks in 2026. Winner: Altria.
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Growth: Philip Morris Is Compounding Faster
Philip Morris expects adjusted EPS to grow 9.9%–11.9% this year and targets 9–11% annual EPS growth, excluding currency, through 2028. Smoke-free products now make up more than 40% of net revenue across 110 markets. VEEV shipments rose 61.6%, and the adjusted operating margin expanded 1.6 pts to 44.7%. The main near-term weak spot is U.S. ZYN, where management expects fourth-quarter adjusted operating income to come in at around zero or slightly negative as it invests heavily.
