Is Philip Morris International (PM) the Best Affordable Dividend Stock to Buy According to Hedge Funds?

Philip Morris International (PM) has been gaining significant attention from hedge funds, with its strong institutional ownership and growing market capitalization. As of 2025, PM has an annual dividend of $5.40 per share, with a yield of 3.48%. The company's dividend has been growing, with a 3.11% year-over-year increase, and it has a history of dividend growth, with 10 consecutive years of increases. But is PM the best affordable dividend stock to buy according to hedge funds?

Key factors driving hedge funds' interest in PM include:

1. Strong Institutional Ownership: PM has a significant stake held by institutions, with 81% ownership. This indicates that the company has credibility in the investment community, as institutions tend to measure their performance against benchmarks and are more likely to invest in companies included in major indices.
2. Growing Market Capitalization: PM's market capitalization has increased by $7.7 billion in the last week, further boosting the one-year return to shareholders, which currently stands at 80%. This growth in market capitalization suggests that the company's stock is gaining value and attracting more investors.
3. Dividend Yield and Growth: PM offers an annual dividend of $5.40 per share, with a yield of 3.48%. The dividend has been growing, with a 3.11% year-over-year increase. This consistent dividend growth, along with the attractive yield, makes PM an appealing investment for income-oriented investors and hedge funds.
4. Financial Performance: PM has a strong financial track record, with revenue of $37.88 billion and profits of $7.03 billion in the last 12 months. The company's earnings per share were $4.52, indicating solid profitability. Additionally, PM has a high return on invested capital (ROIC) of 21.82% and a return on capital employed (ROCE) of 34.00%, demonstrating efficient use of capital.
5. Global Presence and Brand Recognition: PM is a multinational company with a strong global presence and well-known brands like Marlboro, Parliament, and Chesterfield. This global reach and brand recognition can drive long-term growth and provide a stable foundation for the company's operations.



However, PM's exposure to emerging markets and potential regulatory risks can impact its affordability and dividend sustainability. The company generates a substantial portion of its revenue from emerging markets, which can be affected by regulatory challenges and lower affordability. Additionally, PM's dividend payout ratio has been high in recent years, which can be a concern if the company's earnings decline due to regulatory challenges or lower affordability in emerging markets.

In conclusion, PM's strong institutional ownership, growing market capitalization, and attractive dividend yield and growth make it an appealing investment for hedge funds. However, the company's exposure to emerging markets and potential regulatory risks can impact its affordability and dividend sustainability. Investors should carefully consider these factors when evaluating PM as an affordable dividend stock.