PM's strong pricing power in smoke-free products drives revenue growth and supports dividend hikes.

Philip Morris International (PM) shows robust pricing power across its premium smoke-free products like IQOS, ZYN, and VEEV One, which now account for over 41% of its revenue. This shift supports a multi-year growth runway despite declines in traditional cigarettes. The company’s strong free cash flow, dividend growth, and lower debt justify its premium valuation, with a likely dividend increase expected in September. Risks include regulatory challenges in the US and Japan, rising competition, and increased US investments in 2026, but PM remains a buy for dividend-focused investors seeking income diversification.