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Philip Morris International Sets Big Dividend Increase

Philip Morris International

(PM) - Get Philip Morris International Inc. Report

is rewarding tobacco investors with its first ever dividend increase, and it's a big one. The company was spun off from Altria Group in late March.

The company has raised the annual dividend payout to $2.16 from $1.84 a share. Using Thursday's closing stock price of $53.92, that would equate to a 4% dividend yield. Philip Morris is the leading international tobacco company, with seven of the world's top 15 brands. The company held an estimated 15.6% share of the international cigarette market outside of the U.S. in 2007.

This is the type of dividend increase shareholders were hoping for. We have the stock on our recommended list, and would continue to look for pullbacks to add to an existing position or build a new position. We do prefer the dividend yield of tobacco stocks to be even a bit higher than this, which is why a pullback below $50 would make this stock even more attractive.

Philip Morris International is a recommended dividend stock, holding a Rating of 3.5 out of 5 stars.

Altria Group Ups Dividend, Dividend Yield Now More Than 6%

Altria Group

(MO) - Get Altria Group Inc Report

announced it is raising its annual dividend payout to $1.28 from $1.16 a share. The stock now has a dividend yield of 6.08%, based on Thursday's closing stock price of $21.04.

The stock of Altria Group has been a sideways mover for the last five months, as it has remained in a tight price range between $20 and $22.50. The company may have a catalyst to help it in the Food and Drug Administration, however. There is legislation pending which, if passed, would give the FDA the authority to regulate the tobacco industry. Greater restrictions could solidify Altria's position as the market leader, and would most likely make it harder for smaller tobacco players to compete effectively.

We think the stock makes sense at these levels, and investors have a chance to own a 6% dividend-yielding cash cow. Altria Group is one of our absolute top dividend plays.

Altria Group is a recommended dividend stock, holding a Rating of 3.7 out of 5 stars.

Huntsman Offers an Interesting Risk/Reward


TheStreet Recommends

(HUN) - Get Huntsman Corporation Report

is in the news again, as the battle with Apollo Management LP's Hexion unit continues to heat up. Back in June, Hexion announced that Huntsman's deteriorating finances made a deal to acquire Huntsman no longer viable, and so it was backing out.

Huntsman's stock proceeded to drop $10 in that one June trading session. Now both companies are squaring off in a blockbuster legal battle, which is set to begin Sept. 8. Huntsman filed a $3 billion lawsuit claiming Apollo never planned to go through with the deal, and was just simply looking to break up an impending deal that was in place with a rival bidder. Hexion is suing Huntsman to be free of the deal and the $325 million break-up fee.

This is a very interesting situation that investors may want to follow. Huntsman, recently at $13.10, traded down to just under $10 after news of the deal falling apart. The stock has quietly rallied back up a bit, and the company also reported a decent quarter in late July. Some reports have the two companies eventually working this out, not at the original $28 buyout price, but possibly in the high teens. This is but one possible scenario, however, and like in any court case, nothing is certain. The animosity between the two parties is also high. For those with an appetite for risk, Huntsman may be a stock with a $3 potential downside and a $6 potential upside. Again, nothing is certain, but the risk/reward is interesting for short-term investors

PetSmart, Inc. Appears Recession-Proof in Latest Earnings Report



reported a drop in its profits in its earnings report last night, but sales rose 11% to $1.2 billion. Comparable-store sales, a key indicator of a retailer's health, grew 4% during the quarter.

Management believes the company should continue to execute well in this tough environment and the company should remain on track to achieve its targets for the year. The company has decided to slow its store and PetsHotel growth. This strategy makes a lot of sense, because in a tough economic environment, it's very prudent to slow growth and concentrate on maintaining and improving existing properties.

We are putting PetSmart shares on our recommended list, and think the company will continue to deliver solid results. The stock trades at 17 times earnings and has a low dividend yield of 0.49% -- based on Thursday's closing stock price of $24.42. We would not chase any big moves short term, but wait for possibly a pullback to scale into this pet retail giant.

PetSmart is a recommended dividend stock, holding a Rating of 3.5 out of 5 stars.

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Tom Reese and Paul Rubillo are senior editors of Visit for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.

Be sure to visit our complete

recommended list of the Best Dividend Stocks

as well as a

detailed explanation of our ratings system


At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.