PM
Philip Morris International Inc.
Consumer Defensive · Tobacco · United States · Stock
Score Breakdown
Scored for Long-Term Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The company earned a perfect profitability sub-score on the strength of its 36.6% operating margin, 27.9% net margin, and 16.4% return on assets, forming the backbone of the composite score.
- Strong annual growth in net income (+60.8%) and EPS (+60.6%) contributed meaningfully to the growth factor, though moderate top-line growth of 7.3% kept that sub-score from reaching its maximum.
- The dividend factor was tempered by a 76.0% payout ratio, and the absence of any macro theme assignment meant no theme-based contribution, both of which limited the composite to 68.8/100.
Why Not Higher
- The 76.0% dividend payout ratio constrained the dividend sub-score, and the lack of assignment to any of the 24 tracked macro themes meant the theme factor contributed nothing to the composite.
- Quarterly momentum, while generally positive, showed a notable dip in 2025Q4 across revenue, operating income, and net income, preventing a maximum momentum score and reflecting uneven near-term trends.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $37,878,000,000 to FY2025's $40,648,000,000, a gain of +7.3%. Net income expanded more sharply, rising +60.8% from FY2024's $7,057,000,000 to FY2025's $11,348,000,000, with diluted EPS following suit at +60.6% from FY2024's $4.52 to FY2025's $7.26.
The model rewarded the substantial bottom-line acceleration—net income and EPS both roughly doubling in percentage terms—while the more moderate top-line growth of +7.3% likely kept the score from reaching the maximum.
In FY2025, Philip Morris International posted an operating margin of 36.6%, a net margin of 27.9%, and a return on assets of 16.4%.
These metrics reflect a highly efficient business converting a large share of revenue into operating and net income while generating meaningful returns on its asset base, which the model rewarded with a perfect sub-score.
Filing evidence currently available does not support a more specific explanation for this factor.
Over the last four reported quarters, revenue moved from $10,140,000,000 in 2025Q2 to $10,845,000,000 in 2025Q3, then pulled back to $10,362,000,000 in 2025Q4 and $10,146,000,000 in 2026Q1. Operating income followed a similar pattern—$3,712,000,000 in 2025Q2, peaking at $4,263,000,000 in 2025Q3, then settling at $3,373,000,000 in 2025Q4 before recovering to $3,893,000,000 in 2026Q1. Net income showed the same arc: $3,039,000,000, $3,478,000,000, $2,141,000,000, and $2,438,000,000 across those same quarters.
The model observed a peak in 2025Q3 followed by a moderation in 2025Q4 and a partial recovery in 2026Q1, suggesting solid but uneven momentum that supports a above-midpoint score without reaching the maximum.
Dividends per share have risen steadily from $5.04 in FY2022 to $5.14 in FY2023, $5.30 in FY2024, and $5.64 in FY2025, yet the FY2025 dividend payout ratio stands at 76.0% of net income.
The model appears to have recognized the consistent dividend growth trend as a positive signal while penalizing the elevated 76.0% payout ratio, which leaves limited retained earnings relative to net income and constrains the overall dividend score.
Philip Morris International is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a macro theme assignment means the security did not receive any theme-based score contribution under the model's current methodology; this reflects the model's classification state and should not be read as a commentary on the company's business characteristics.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Philip Morris International earned a composite score of 68.8/100 and is classified as a Core Holding Candidate with a Low risk rating. The company delivered strong FY2025 results, with revenue rising 7.3% to $40.6 billion and net income surging 60.8% to $11.3 billion, while profitability metrics were exceptional—operating margin of 36.6%, net margin of 27.9%, and return on assets of 16.4%. Quarterly momentum showed a peak in 2025Q3 followed by moderation and a partial recovery, and the dividend, while growing steadily, carries a 76.0% payout ratio that constrains the income score. The absence of a macro theme assignment weighed on the composite, preventing a higher overall ranking.
Plain English
Philip Morris had a strong year—revenues and profits grew meaningfully, and the business is highly efficient at turning sales into profit—but its dividend eats up most of its earnings and it doesn't fit into any of the model's special investment themes, which held the overall score back.
Bull Case vs. Bear Case
Bull Case
- Exceptional profitability: FY2025 operating margin of 36.6% and net margin of 27.9% reflect a highly efficient business that converts a large share of revenue into income, earning a perfect profitability sub-score.
- Powerful bottom-line growth: Net income rose 60.8% from $7.1 billion in FY2024 to $11.3 billion in FY2025, with diluted EPS climbing from $4.52 to $7.26—demonstrating substantial earnings acceleration beyond the 7.3% top-line gain.
- Consistent dividend growth: Dividends per share have risen every year from $5.04 in FY2022 to $5.64 in FY2025, signaling a reliable and growing income stream for shareholders.
Bear Case
- Elevated payout ratio: The FY2025 dividend payout ratio of 76.0% of net income leaves limited retained earnings, constraining financial flexibility and capping the dividend factor score.
- Uneven quarterly momentum: Revenue and net income peaked in 2025Q3 and pulled back in 2025Q4 before only partially recovering in 2026Q1, indicating solid but inconsistent near-term trends.
- No macro theme exposure: Philip Morris is not assigned to any of the 24 tracked macro themes, meaning it received no theme-based score contribution, which weighed on the composite total.
What Could Change the Picture
Bullish Triggers
- A sustained acceleration in quarterly revenue and net income beyond the 2025Q3 peak—particularly if 2026Q1's partial recovery extends into subsequent quarters—would strengthen the momentum case.
- A reduction in the dividend payout ratio, allowing more earnings to be retained while still growing dividends per share, would improve the dividend factor score and signal greater financial flexibility.
Bearish Triggers
- A reversal of the strong FY2025 net income growth, with net income declining back toward FY2024 levels, would significantly undermine the bull case built on bottom-line acceleration.
- Further deterioration in quarterly operating income below the 2025Q4 trough of $3.4 billion would signal that the momentum recovery in 2026Q1 was temporary rather than a durable trend.
Risk Profile
Low RiskThe Low risk rating is supported by a highly profitable business generating strong returns on a $69.2 billion asset base, though the negative debt-to-equity ratio of -4.52 in FY2025 indicates a leveraged balance sheet structure that warrants monitoring. Quarterly results have been uneven—with a peak in 2025Q3 followed by a pullback and only partial recovery in 2026Q1—suggesting some variability in near-term earnings delivery.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.