2 Dividend Stocks Worth Buying More Of, Even At Today's Prices

The article argues Philip Morris International and Nintendo are attractive dividend growth names, citing PM's $16.9B smoke-free revenue in 2025, up 15% year over year, and its 3.8% yield. For Nintendo, management's 60% payout policy and a projected profit inflection from the Switch 2, with 19 million units expected through fiscal year-end, underpin a forecasted 5% dividend yield over the next few years. The piece is largely opinionated commentary rather than new hard news, so expected market impact is limited.

Analysis

The clean read here is not “high dividend vs low dividend,” but which businesses are entering a phase where capital return can accelerate faster than the market expects. PM looks like a near-term cash compounding story: smoke-free mix shift should keep margin expansion outrunning volume erosion, so dividend growth can remain mechanically supported even if top-line growth stays mid-single digits. The second-order effect is that PM becomes a relative-safe harbor within consumer defensives if rates stay sticky, because an expanding payout plus buyback capacity can attract yield investors without requiring multiple expansion.

Nintendo is a different setup: the market is likely underestimating how long the earnings bridge takes from hardware launch to software monetization. Hardware cycles usually create an early profit dip or plateau before attach rates and first-party software pull through, so the dividend inflection is more a 12-24 month story than a quick re-rating catalyst. The real upside is that once the installed base reaches critical mass, incremental software and digital sales should convert at much higher margin, meaning payout growth could steepen faster than consensus models assuming linear hardware economics.

The contrarian miss is that both names are being framed as dividend stories when the real trade is earnings quality. For PM, the risk is regulatory/mix shock on nicotine alternatives if pouch growth normalizes or faces restrictions, which would slow the dividend-growth narrative but not necessarily the current income stream. For Nintendo, the market may be over-anchoring on the console cycle’s low-margin phase and underappreciating operating leverage from IP monetization; that said, if Switch 2 adoption stalls in the first 6-9 months, the payout multiple thesis gets deferred, not invalidated.

Key Decisions for Investors

• Long PM vs short XLP basket on a 6-12 month horizon: PM has better self-funded dividend growth optionality than the broader staples complex, with upside if smoke-free mix stays above 40% and rates remain elevated.
• Initiate a staged long in Nintendo only on post-launch weakness or after any earnings reset; target a 12-24 month hold for dividend inflection, with the risk being a slower software attach-rate than the market is pricing.
• Pair trade: long PM / short a low-growth tobacco or staple dividend proxy to express the view that payout growth, not current yield, is the scarce asset in defensives.
• Avoid chasing Nintendo on headline hardware shipments alone; wait for evidence of software monetization and margin expansion before paying for the dividend uplift thesis.
• For income mandates, prefer PM over high-yield distressed names: the risk/reward is better because the dividend is supported by operating momentum rather than financial engineering.