What Philip Morris International actually does

Philip Morris International (PMI) sells tobacco products in more than 180 countries outside the United States. Marlboro is its best-known brand, but its biggest growth bet is smoke-free products, especially the IQOS heated-tobacco system and, since the acquisition of Swedish Match, ZYN nicotine pouches.

The company was spun off from Altria in 2008, which is why Altria sells Marlboro in the US while PMI sells it elsewhere. It is registered in Stamford, Connecticut, and operates from Lausanne, Switzerland.

How the business makes money

Cigarettes remain very profitable and still produce most of the cash. But the company’s long-term plan is to convert smokers to smoke-free alternatives, and products like IQOS and ZYN now generate a growing share of revenue.

Operating in many countries brings currency exposure: a strong dollar reduces reported results.

The dividend story

PMI pays a quarterly dividend and has raised it regularly since the spin-off. The yield is typically above the market average.

The dividend is large compared with profit, so the payout ratio matters. See how to read it in our payout ratio guide.

What to keep an eye on

  • Regulation. Rules on heated tobacco and nicotine pouches differ widely between countries.
  • Currencies. Many currencies move against the dollar.
  • Smoke-free growth. The investment case depends on the shift working.
  • Litigation and taxes. Both can change the economics.

Quick take

PMI offers a high yield and a credible transition story. The dividend is attractive, but success depends on smoke-free growth outweighing the decline in cigarettes.