MO vs PM: Dividend Comparison
Dividend data as of
Altria Group, Inc. (MO) and Philip Morris International Inc. (PM) are both in the Consumer Staples sector, making them natural rivals for dividend investors. MO offers a significantly higher 6.46% yield compared to PM's 3.09%, a gap of 3.37%. Both stocks show similar dividend growth rates, each around 4.3% over the past five years. MO holds the edge in dividend safety with a "Safe" rating. Both are classified as Dividend Contenders.
Verdict
Yield Analysis
MO yields 3.37% more than PM. In dollar terms, MO pays $4.16/share vs PM's $5.64/share annually.
Dividend Growth
MO: Dividend growth has been steady, with a 3-year CAGR of 4.1% and a 5-year CAGR of 4.3% (10-year: 6.6%).
PM: Dividend growth is accelerating — the 3-year CAGR of 4.8% exceeds the 5-year rate of 3.6% and the 10-year rate of 3.5%.
Dividend Safety
MO: The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.0x.
PM: The payout ratio of 78% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.3x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in MO vs PM today?
At $67.23 per share, $10,000 buys about 148.7 shares of Altria Group, Inc. (MO). Each share pays $4.16 per year in dividends, so the position starts out generating roughly $619 per year — about $52 a month.
At $187.56 per share, $10,000 buys about 53.3 shares of Philip Morris International Inc. (PM). Each share pays $5.64 per year in dividends, so the position starts out generating roughly $301 per year — about $25 a month.
MO is the larger income stream from day one: $318 per year more on the same $10,000 invested.
What could $10,000 of MO or PM income look like in 10 years?
Altria Group, Inc. (MO) has raised its dividend about 4.3% a year over the past five years. If that pace held, the $646 per year that $10,000 generates today at the current 6.46% yield would reach $980 per year by 2036 — a 9.8% yield on the original cost.
Philip Morris International Inc. (PM) has raised its dividend about 3.6% a year over the past five years. If that pace held, the $309 per year that $10,000 generates today at the current 3.09% yield would reach $439 per year by 2036 — a 4.4% yield on the original cost.
On those trailing rates, MO pays more in 2036: $980 versus $439 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would PM's dividend growth overtake MO's higher yield?
It doesn't, on the trailing numbers. Altria Group, Inc. (MO) yields more today (6.46% vs 3.09%) and has also grown its dividend at least as fast (4.3% vs 3.6% a year over five years). Unless PM accelerates its raises or MO stumbles, PM never closes the income gap — MO wins on both current income and growth.
Can MO and PM afford their dividends?
Altria Group, Inc. (MO) earns $4.12 per share against $4.16 paid out in dividends — 1.0x coverage (a 1% payout ratio).
Philip Morris International Inc. (PM) earns $7.26 per share against $5.64 paid out in dividends — 1.3x coverage (a 78% payout ratio).
Coverage is similar for both, so neither dividend looks meaningfully more stretched than the other on current earnings.
Which fits an early-retirement income portfolio better, MO or PM?
For income you need right now, Altria Group, Inc. (MO) leads: $100,000 invested today pays about $538 a month at the current 6.46% yield, versus $257 a month from Philip Morris International Inc. (PM) at 3.09%.
MO also leads on dividend growth (4.3% vs 3.6% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: MO has raised its dividend 16 consecutive years; PM has raised its dividend 13 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $1,833/yr in MO vs $595/yr in PM by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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