Moving Towards High Margin, Smoke Free Tech

We just covered the 14 Best Low Risk High Growth Stocks to Buy Right Now and Philip Morris International Inc. (NYSE:PM) ranks 11th on this list.

Philip Morris International Inc. (NYSE:PM) is moving away from reliance on traditional cigarettes to high-margin, smoke-free technology. The acquisition of Swedish Match has turned the US market into the biggest growth driver for the firm. In early 2026, ZYN nicotine pouches reached a structural milestone, shipping nearly 800 million cans annually. With a retail market share of over 70% in the US, ZYN provides a high-margin revenue stream that is currently growing at double-digit rates. Smoke-free products like ZYN and IQOS carry significantly higher gross margins than traditional cigarettes. As these products now account for over 41% of total net revenue, they are structurally expanding the company’s overall profit profile.

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Pixabay/Public domain

For risk-averse investors, the core business of Philip Morris International Inc. (NYSE:PM) acts as a financial fortress. Even during economic downturns, nicotine consumption remains steady. PM’s massive global footprint, selling in over 180 markets, provides geographic diversification that protects against localized recessions or currency crashes. The stock is also a favorite among income-focused investors because of its extreme reliability. In late 2025, PM announced an 8.9% dividend hike, the largest in over a decade. As of April, the annual dividend stands at $5.88 per share, yielding approximately 3.7%–3.8%. Management has targeted $45 billion in aggregate operating cash flow through 2028. For a beginner, this visibility means the company has a clear plan to pay its dividend and buy back shares for years to come.

While we acknowledge the potential of PM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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