General Electric Company (GE), Royal Dutch Shell plc (ADR) (RDS.B), Philip Morris International Inc. (PM): Dividend Picks From a Famous Fund

With an over 3.5% dividend yield, some might look at this as an income investment. It’s much more. While the tobacco industry in this country is mature and losing customers, Philip Morris has notable exposure to emerging markets (about three-quarters of 2012 sales) and actually saw organic volume growth between 2011 and 2012.

Emerging markets present a huge opportunity because they tend to have less restrictive regulations. Moreover, as these nations industrialize, more people are likely to start smoking. Increasing incomes will also lead to smokers stepping up to the higher-end brands that Philip Morris International Inc. (NYSE:PM) sells.

If you can handle owning a “sin” stock, Philip Morris International Inc. (NYSE:PM) offers a nice combination of yield and dividend growth potential. The constant regulatory risk that tobacco companies face might scare away the most conservative investors, but all others would do well to get to know this company.

Big and Dividends

The three companies above all provide investors with hefty yields and the potential for dividend growth in the future. They are also large and financially strong. These are exactly the type of companies that an investor can feel confident owning in good times and bad.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Chevron Corporation (NYSE:CVX). The Motley Fool owns shares of General Electric Company and Philip Morris International Inc. (NYSE:PM).