Compare the 10-year performance and dividend income and total return of two biggest companies in the Tobacco industry: Altria Group, Inc. (MO) and Philip Morris International Inc. (PM).

Altria Philip Morris used to be one company until a split in 2008. After the split, Altria (MO) retained the US part of the combined business, while Philip Morris International (PM) got all the international markets. After split, shareholders of the combined company, received 1 share of each PM and MO.

Given this history, it is especially interesting to see who these two companies did post-split, with equal distributions to pre-split shareholders.

MO's latest dividend payment is $1.02, a yield of 7.7%, and a total payout of $9,330. Conversely, PM's latest dividend is $1.35, with a yield of 4.3%, amounting to $7,023 in dividends paid.

Here are 10-year total returns of these two companies:

MO total return with dividends reinvested: 120.7%
PM total return with dividends reinvested: 145.6%

Compare Earnings, Free Cash Flow, Dividend Payout Retios and other metrics for MO vs PM.

10 years returns for MO & PM - dividends, price growth and total returns:

Stats below compares the performance of a $10,000 investment into each company 10 years ago, with dividends being aoutomatically reinvested (DRIP) on the payout day, with no additional investments.

Here is a chart comparing the 10-year total returns in of MO and PM, shown side-by-side. These total return figures take into account dividend reinvestment and represent the value of all shares owned at each respective point in time.

Estimate Dividend Snowball and total future returns for MO and PM with our dividend (DRIP) calculator.

Here are 10 year price charts for MO & PM:

In the span of 10 years, the price of MO surged by 19%, climbing from $44.36 to $52.96, which equates to a compound annual growth rate (CAGR) of 1.81%.

Similarly, over the same timeframe, PM experienced a price increase of 48%, escalating from $84.82 to $125.62, marking a CAGR of 4.08%.

Dividend payments and yield graphs for MO & PM:

For MO, the most recent dividend stands at $1.02, with a yield of 7.7%. The initial dividend was $0.98, and over the past 10 years, the total dividends paid amount to $9,330, demonstrating a dividend CAGR of 6.97%.

Similarly, PM's latest dividend is $1.35, yielding 4.3%. The first dividend was $0.94, and the cumulative dividends paid over the last decade total $7,023, reflecting a dividend CAGR of 3.05%.

Charts above show historic dividend payments for each company, Dividend Yield curve overlaying the payments as well as Dividend CAGR for last 1 year, 2 years, 5 years and 10 years. Dividend Yield curve helps visualize how expensive or cheap the stock was at the time of the dividend payments.

If overall yield-curve is going up, the stock is considered inexpensive, relative to its dividend. If curve is loping down, the stock is getting more expensive relative to its dividends.

Dividend CAGR (Compound Annual Growth Rate) is how much the dividend is growing, averaged per year.

Based on MO's 10-year CAGR, it would take 10.33 years to double your dividend yield-on-cost.
For PM's and its 10-year CAGR, it would take 23.61 years to double your dividend yield-on-cost.

CAGR 72 Rule: Simply put - if your COMPOUND interest (or dividend) rate is 7% it will take roughly 10 years to double your investment. If your rate is 10%, it will take approximately 7 years to double the investment. Basically to know the interest/yield rate that you would need to earn to double your investment, take 72 and divide by number of years.

For example: You want to double your investment in 5 years. 72/5 years = 14.4%. That's the interest rate that you would need to double your portfolio value.

While most dividend companied do not offer anything near 14.4% dividned yield, the CAGR or dividend growth is where the magic happens. Unlike bonds and CDs, the dividend or "interest payment" of dividend-paying stocks usually goes up!

Caution: If a company is paying something like a 14.4% dividend - most likely it's a yield/value trap, and a dividend cut is coming soon.

Investing $10,000 in MO & PM today: Estimated Future Return & Dividends:

Reflecting on the performance of the past decade, MO achieved a share price compound annual growth rate (CAGR) of 1.81%, accompanied by a dividend CAGR of 6.97%.

In the same timeframe, PM recorded a share price CAGR of 4.08%, along with a dividend CAGR of 3.05%.

How can a $10,000 investment perform based historic CAGR number:

If you invest $10000 today into one of these companies, and utilizing these CAGR figures, we can forecast the 10-year future performance of your initial, assuming dividends were continuously reinvested (DRIP), would have experienced growth and accumulated dividends as detailed below:

And here is how your $10,000 investment into Altria Group, Inc. or Philip Morris International Inc. could perform based on CAGR figers above, represented on a graph - a Dividend DRIP Snowball:

Try our dividend DRIP calculator: MO or PM - estimate your returns and dividend income!

Using our dividend calculator, you can customize initial investment, projected Dividend & Price growth rate, additional investment amount and frequency, to fit your investing style and goals.

The figures presented above are projections based on the Dividend and Price CAGR for each stock, and they represent potential future returns. It's important to note that these calculations are made under the assumption of DRIP (Dividend Reinvestment Plan).

Please remember, these are only estimations, and actual returns may vary. We cannot guarantee that your actual returns will align precisely with these metrics.

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