Quick Read
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Altria (MO) yields about 6%, nearly double Philip Morris's (PM) 3%, with both dividends covered at roughly 78% of earnings guidance.
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Philip Morris targets annual EPS growth of 9 to 11 percent through 2028, with smoke-free products already exceeding 40% of net revenue across 110 markets.
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Altria( NYSE:MO ) or Philip Morris International( NYSE:PM ): which tobacco stock makes more sense for a retirement portfolio right now? Both companies beat third-quarter estimates, raised their dividends, and climbed sharply this year. Altria is up 37.87% year to date, and Philip Morris is up 31.41%. The choice comes down to a high-yield U.S. cash source against a lower-yield international compounder. They differ across income, growth, and valuation.
Income: Altria Pays Nearly Twice the Yield
Altria raised its dividend 4.7% in August to an annualized $4.44 per share. That was its 61st dividend increase in 57 years. At $75.82, the forward yield comes in at about 5.86%. Philip Morris raised its payout 8.8% to $6.40 annualized, its 19th consecutive annual increase. At $205.45, though, it yields only about 3.12%.
A similar margin covers each payout. Altria's dividend equals roughly 78% of the low end of its raised 2026 adjusted EPS guidance of $5.66 to $5.74. Philip Morris pays out about 77% of the bottom of its $8.29 to $8.44 range. Altria has less leverage, with debt at 1.9x EBITDA. Philip Morris carries 2.17x net debt to adjusted EBITDA. Altria also added a $1B buyback expansion, while Philip Morris plans no buybacks in 2026. Winner: Altria.
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Growth: Philip Morris Is Compounding Faster
Philip Morris expects adjusted EPS to grow 9.9%–11.9% this year and targets 9–11% annual EPS growth, excluding currency, through 2028. Smoke-free products now make up more than 40% of net revenue across 110 markets. VEEV shipments rose 61.6%, and the adjusted operating margin expanded 1.6 pts to 44.7%. The main near-term weak spot is U.S. ZYN, where management expects fourth-quarter adjusted operating income to come in at around zero or slightly negative as it invests heavily.
Altria guides to EPS growth of 4.5% to 6%. Its adjusted domestic cigarette volumes fell 4%, and Marlboro's retail share slipped 1.0 pt to 39.5% as discount brands gained two share points. The company's own chief executive said: "The consumer continues to be under economic pressure, no doubt." Altria's NJOY ACE vape is also off the U.S. market for now, and management has given no relaunch date. Winner: Philip Morris.
Valuation: Altria Trades at a Steep Discount
Altria trades at 13 times forward earnings. Philip Morris trades at 23. Enterprise value to EBITDA shows the same story: 12.59 for Altria against 19.01 for Philip Morris. The premium on Philip Morris prices in a lot of the growth already, and management has warned that full-year results will more likely land at the midpoint or lower half of guidance.
Analysts lean the other way. Altria's consensus target of $73.45 is below its current price, while Philip Morris carries a $210.80 target and zero sell ratings. That shows how much Wall Street values Philip Morris's growth. Still, for a buyer focused on what each dollar of earnings costs, Altria comes out ahead. Winner: Altria.
Verdict: Altria for Income Today, Philip Morris for a Longer Runway
For retirees living off portfolio income, Altria offers the stronger current income profile. It pays nearly double Philip Morris's yield with similar payout coverage, carries less leverage, buys back shares, and trades at a lower forward earnings multiple. Its slow business fall is a known risk, and management has a stated goal of mid-single-digit dividend growth through 2028.
Philip Morris offers more long-term appeal for investors who are 10 or more years from heavy withdrawals. Its 10-year share price gain of 253.11% compares with Altria's 134.93%. Pair that with roughly double Altria's earnings growth and a faster-rising dividend, and Philip Morris has the profile to build more income over the long run.
For Altria, the key things to watch are the NJOY relaunch and its contract manufacturing deal with Philip Morris, which begins in 2027. For Philip Morris, the next checkpoint is its Investor Day in Q2 next year, where it will update its long-term targets.
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