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

The article argues that Philip Morris International and Nintendo are attractive dividend growth stocks, citing Philip Morris's $16.9 billion smoke-free revenue run-rate, up 15% year over year, and a 3.8% yield. For Nintendo, it highlights a potential shift to about $5 billion-plus in net profit and a forecasted 5% dividend yield over time under a 60% payout policy, supported by Switch 2 and game sales momentum. The piece is fundamentally bullish on dividend growth prospects, but it is largely commentary rather than new company-specific news.

Analysis

PM is the cleaner expression of the thesis because the market already underwrites its transition, but likely still underestimates how much mix shift can offset category contraction. The key second-order effect is that smoke-free growth is turning the dividend into a quasi-operating-leverage story: once the new product base is large enough, incremental margin dollars should expand faster than revenue, giving room for a faster payout trajectory than the market models today.

The risk is not demand collapse so much as regulatory friction and channel normalization. If U.S. pouches or heat-not-burn products face label, tax, or flavor restrictions, the multiple can compress quickly even if earnings remain intact, because this is a sentiment-sensitive cash-return story rather than a secular growth compounder. That makes the next 1-2 quarters more about guidance credibility than near-term volume prints.

Nintendo is the higher-beta version of the same dividend-growth setup: the equity market usually misprices the lag between hardware sell-through and software monetization. The hidden catalyst is software attach rate and services mix over the next 12-24 months; if attach stays strong, operating margins can expand meaningfully without requiring heroic unit growth, which supports a much larger payout pool. The contrarian view is that consensus may be too anchored to console-cycle fatigue and underappreciate how cash-rich balance sheet optionality reduces dividend risk even if hardware momentum cools.

Key Decisions for Investors

• Long PM on pullbacks over the next 1-3 months; target a 10-15% total return with dividend support, but trim if regulatory headlines create a >5% gap up in implied risk premium.
• Use PM as a defensive cash-return compounder versus lower-quality high-yield tobacco peers; prefer PM over names where yield is high because growth is broken.
• For Nintendo, prefer a starter long only after evidence that software attach and post-launch monetization are accelerating; 6-12 month horizon, with upside tied to dividend re-rating rather than multiple expansion alone.
• Structure a pair: long PM / short a higher-yield but slower-growth tobacco proxy if available in the book, to isolate dividend-growth quality over headline yield.
• Avoid chasing the thesis if PM or Nintendo rallies on dividend optimism without earnings confirmation; the better entry is on 1-2 quarter lag between product adoption and payout expectations.