July 20, 2024

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3 Dividend Stocks That Could Help Set You Up for Life

2 min read

Holding a portfolio of quality dividend stocks that deposit cash in your account makes the occasional market dip much easier to tolerate. Three Motley Fool contributors recently selected three solid companies with long records of paying regular dividends to shareholders. Here’s why Philip Morris International (NYSE: PM), Williams-Sonoma (NYSE: WSM), and Realty Income (NYSE: O) could set up you for years with passive income.

This classic Dividend King is delivering surprising growth

Jeremy Bowman (Philip Morris International): Philip Morris International might seem like a surprising choice for a dividend stock for life, but the company is more than just an ordinary tobacco stock during a time of declining cigarette consumption.

Philip Morris has the chops to compete with any dividend stock. Including the time when it was combined with Altria, Philip Morris has raised its dividend every year for more than 50 years straight. The international Marlboro seller also currently offers a dividend yield of 5.1%, enough to make it a high-yield stock, but what really makes the stock attractive for long-term dividend investors is the way the company has successfully pivoted to next-gen products like Iqos heat-not-burn tobacco sticks and Zyn nicotine pouches.

In fact, smoke-free products now make up roughly 40% of its revenue and that business is growing quickly. Overall shipment volume was up 3.6%, driven by 21% growth in heated tobacco units and 36% growth in oral smoke-free products.

That performance helped drive organic revenue up 11% to $8.8 billion and adjusted currency-neutral earnings per share (EPS) was up 23% to $1.50. The company also demonstrated confidence in the Iqos brand by buying back the rights to sell it in the U.S. from Altria for $2.7 billion, and it’s now building out its presence in that market.

While cigarette consumption is falling, demand for nicotine products still exists and Philip Morris is ahead of its rivals in capturing it. That should deliver ample…

2024-06-22 08:00:00

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