5 Best Dividend Stocks to Buy According to Terry Smith

1. Philip Morris International Inc. (NYSE: PM)

Smith’s Stake Value: $1,720,542,000
Percentage of Terry Smith’s 13F Portfolio: 5.47%
Dividend Yield: 4.85%
Number of Hedge Fund Holders: 48

Philip Morris International Inc. (NYSE: PM), through its subsidiaries, produces and trades cigarettes. It was founded in 1987 and is placed first on the list of 10 best dividend stocks to buy according to Terry Smith. Shares of the company rallied 39.94% in the last 12 months, resulting in a $154.36 billion market capitalization.

On June 11, the board of Philip Morris International sanctioned a new share repurchase program of up to $7 billion, with a target of spending $5 billion to $7 billion over three years. The new buyback program is anticipated to begin after the company’s second quarter earnings call. The company also declared a $1.20 per share dividend for the first quarter of 2021, payable on July 12, 2021. On April 9, JPMorgan initiated coverage on Philip Morris, rating the stock as “Overweight,” with a price target of $105. 

Fundsmith LLP is a leading shareholder in Philip Morris International Inc. (NYSE: PM), with 19.39 million shares worth $1.72 billion, representing 5.47% of its portfolio. 

Fundsmith LLP, in its fourth quarter of 2020 investor letter, mentioned Philip Morris. Here is what the fund has to say about Philip Morris in its letter:

“We are impressed with Philip Morris’s development of Reduced Risk Products or RRPs, most notably its heat not burn system iQOS. It seems we are not the only ones to view it this way as it was recently included in the Dow Jones Sustainability North America Index for the first time. For the moment the shares are weighed down by COVID related disruption to some of its markets and simple prejudice which seems to prevent some commentators from weighing the benefits the RRPs bring against the obvious fact that it is a tobacco company.”

You can also take a peek at 10 Extreme Dividend Stocks with Huge Upside and 10 Blue Chip Dividend Stocks Hedge Funds Are Buying. 

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