MO vs PM: Dividend Yield, Growth & Safety Comparison
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.
Key Metrics Comparison
| Metric | MO | PM |
|---|
| Dividend Yield | 6.46% | 3.09% |
| Annual Dividend | $4.16 | $5.64 |
| 5-Year CAGR | 4.3% | 3.6% |
| Payout Ratio | 1% | 78% |
| Consecutive Years | 16 | 13 |
| Price | $67.23 | $187.56 |
Yield Comparison
Altria Group, Inc. (MO) currently yields 6.46%, which is attractive for the broader market. That's 3.37% more than Philip Morris International Inc. (PM), which yields 3.09%. In dollar terms, MO pays $4.16/share annually versus PM's $5.64/share.
Dividend Growth
Over the past five years, MO has grown its dividend at a 4.3% CAGR compared to PM's 3.6%. 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's dividend safety is rated "Safe." The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.0x. PM's dividend safety is rated "Moderate." 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. MO's payout ratio of 1% is more conservative than PM's 78%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in MO generates approximately $646/year in dividend income, compared to $309/year from PM — a difference of $337/year. At $100,000, that gap widens to $3370/year.
Verdict
- Best for income: MO
- Best for growth: MO
- Best for safety: MO
Frequently Asked Questions
Which has a higher dividend yield, MO or PM?
Altria Group, Inc. (MO) has a higher dividend yield of 6.46% compared to Philip Morris International Inc. (PM) at 3.09%.
Is MO or PM a better dividend growth stock?
Altria Group, Inc. has the stronger dividend growth with a 5-year CAGR of 4.3%, compared to Philip Morris International Inc.'s 3.6%.
Which is safer for dividend income, MO or PM?
Altria Group, Inc.'s dividend safety is rated "Safe" while Philip Morris International Inc. is rated "Moderate." The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.0x. 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.
How much income does $10,000 in MO vs PM generate?
A $10,000 investment in MO generates approximately $646/year in dividends, while the same amount in PM generates about $309/year.
Is MO or PM a Dividend Aristocrat?
Altria Group, Inc. is a Dividend Contender (16 years) and Philip Morris International Inc. is a Dividend Contender (13 years).
Which has a lower payout ratio, MO or PM?
Altria Group, Inc. has a lower payout ratio of 1% compared to Philip Morris International Inc.'s 78%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
MO vs PM: which is better for retirement income?
It depends on your priorities. MO for current income, MO for dividend growth, MO for safety. Many retirement investors hold both for diversification.
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