Investment Opportunities in Consumer Staples Sector
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 01 2026
0mins
Source: Fool
- Philip Morris Growth Potential: Despite declining cigarette volumes, Philip Morris International (PM) demonstrates strong pricing power that drives sales growth, with an expected organic revenue increase of 5% to 7% in 2023, while its smoke-free products like Iqos and Zyn saw market sales growth of 11% and 10%, respectively, indicating future growth potential.
- Coca-Cola Brand Strength: Coca-Cola (KO) leverages its strong brand equity and global marketing strategies, achieving 10% organic revenue growth in Q1, with concentrate sales rising by 8%, and projecting 4% to 5% organic revenue growth and 8% to 9% EPS growth for the year, reflecting robust performance amid market recovery.
- Chewy's Margin Expansion: Online pet retailer Chewy (CHWY) achieved an 8.3% revenue growth through its autoship model, with EBITDA margins increasing to 5.7%, and is projected to expand margins by another 100 basis points this year, with a long-term goal of reaching 10%, showcasing the attractiveness of its business model and profitability growth.
- Defensive Nature of Consumer Staples: The consumer staples sector is viewed as a defensive investment during economic downturns, and while tech stocks attract attention, companies like Philip Morris, Coca-Cola, and Chewy exhibit strong investment value through stable growth and solid financial performance.
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Analyst Views on PM
Wall Street analysts forecast PM stock price to rise
11 Analyst Rating
8 Buy
3 Hold
0 Sell
Moderate Buy
Current: 180.910
Low
175.00
Averages
191.95
High
210.00
Current: 180.910
Low
175.00
Averages
191.95
High
210.00
About PM
Philip Morris International Inc. is an international tobacco company. The Company’s product portfolio primarily consists of cigarettes and smoke-free products. Its smoke-free business (SFB) also includes wellness and healthcare products, as well as consumer accessories, such as lighters and matches. The Company’s segments include Europe Region; South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa Region (SSEA, CIS & MEA); East Asia, Australia & PMI Global Travel Retail (EA, AU & PMI GTR), and Americas Region. The Company's brands include Marlboro, HEETS, IQOS, IQOS ILUMA, TEREA, VEEV and ZYN. Its IQOS smoke-free product brand portfolio includes heated tobacco and nicotine-containing vapor products. Its international cigarette brands are Chesterfield, L&M, and Philip Morris. It also owns a number of local cigarette brands, such as Dji Sam Soe and Sampoerna A in Indonesia, and Fortune and Jackpot in the Philippines.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
FDA Grants First MRTP Orders for ZYN Nicotine Pouches
- Risk Reduction Authorization: The FDA has granted MRTP orders for 20 variants of ZYN nicotine pouches, allowing PMI to market claims that using ZYN lowers the risk of mouth cancer and heart disease, marking a significant milestone in the industry.
- Market Impact: PMI CEO Stacey Kennedy stated that this decision provides over 45 million legal-age nicotine consumers with scientific evidence, ensuring they have access to accurate information that promotes healthier choices.
- Product Innovation: As the first nicotine pouch authorized by the FDA, ZYN underscores PMI's leadership in tobacco alternatives, which is expected to drive future market share growth for the company.
- Consumer Behavior Change: FDA evaluations indicate that over 50% of ZYN users reported no cigarette consumption in the past 30 days, with 80.7% reducing their cigarette use, demonstrating ZYN's effectiveness in reducing smoking behaviors.
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Altria Group: A Stable Income Investment Choice
- High Dividend Yield: Altria currently boasts a forward dividend yield of 5.9% and has raised its quarterly dividend for 57 consecutive years, making it one of the so-called 'Dividend Kings', which underscores its appeal and stability for long-term investors.
- Low Volatility Feature: With a five-year monthly beta of 0.50, Altria's stock exhibits only half the volatility of the S&P 500 index, making it an ideal choice for low-risk investors during market fluctuations.
- Industry Resilience: Operating in a sector with inelastic demand, Altria's business model allows it to maintain stable revenue streams even during economic downturns, although future earnings and dividend growth heavily depend on the success of its pivot to non-combustible tobacco products.
- Portfolio Anchoring: While Altria is a top choice for low-volatility investors, it is advisable for investors to include other stocks with strong defensive and dividend growth records in their portfolios to ensure steady income even during market downturns.
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Altria Group: A Steady Income Blue Chip Stock
- High Dividend Yield: Altria Group currently boasts a forward dividend yield of 5.9%, having raised its quarterly dividend for 57 consecutive years, demonstrating its stability and appeal as a long-term investment.
- Low Volatility Feature: With a five-year monthly beta of 0.50, Altria's stock price volatility is only half that of the S&P 500 index, making it an ideal choice for low-volatility investors.
- Industry Resilience: As a leading player in the tobacco industry, Altria exhibits strong performance during economic downturns due to the inelastic demand for its products, allowing it to maintain stable cash flows amidst market fluctuations.
- Diversified Investment Advice: While Altria is a top choice for low-volatility investors, it is recommended that investors also consider other defensive stocks to enhance the stability and income potential of their portfolios.
See More
Philip Morris Receives FDA Authorization for ZYN Sales
- FDA Authorization Milestone: The FDA has issued Modified Risk Tobacco Product (MRTP) orders for 20 ZYN nicotine pouch variants, enabling PMI to market claims of reduced risks for several diseases, marking a significant achievement in the company's smoke-free innovation leadership.
- Diverse Product Range: The FDA's orders include various ZYN flavors such as Cool Mint and Peppermint, available in 3 mg and 6 mg strengths, enhancing PMI's product portfolio and catering to diverse consumer preferences in the nicotine market.
- Strong Scientific Basis: The FDA's review highlighted that nicotine pouches deliver nicotine without burning tobacco, significantly reducing harmful chemical exposure, with data indicating that many adult smokers switching to ZYN reported no cigarette use in the past 30 days.
- Positive Market Outlook: PMI estimates that by December 31, 2025, over 43 million legal-age consumers will be using its smoke-free products, projected to account for 43% of Q1 2026 net revenues, indicating robust growth potential in the smoke-free product market.
See More
Philip Morris Secures FDA Approval for Zyn Modified Risk Claim
- Regulatory Support: Philip Morris has received FDA approval to market Zyn nicotine pouches with a modified risk claim, indicating a lower risk of tobacco-related diseases compared to cigarettes, which will enhance brand recognition and sales potential for Zyn.
- Product Range: The FDA allows 20 Zyn products to be marketed with a modified risk claim, emphasizing their advantages in reducing risks of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis, further solidifying Zyn's position as a safer alternative.
- Market Outlook: Following the FDA's initial approval for Swedish Match to sell Zyn products in January 2025, this new authorization enables them to be marketed as a safer alternative to cigarettes, likely boosting Zyn's market share in the rapidly growing smokeless product segment.
- Investor Reaction: Despite the positive implications for Zyn's market prospects, Philip Morris's stock fell by 0.85% on the day, ending a five-day winning streak, reflecting market caution regarding the overall outlook for the tobacco industry.
See More
FDA Approves Zyn Nicotine Pouches as Lower-Risk Products
- Regulatory Win: The FDA's approval for Philip Morris's Zyn nicotine pouches to be marketed as lower-risk than cigarettes represents a significant regulatory victory for the tobacco giant, particularly as cigarette sales continue to decline in the U.S.
- Health Claims: This decision allows 20 Zyn products to claim that switching to Zyn reduces the risk of mouth cancer, heart disease, and other smoking-related illnesses, providing Philip Morris with a powerful health-related marketing tool to enhance the acceptance of smoke-free products.
- Market Trend: Zyn nicotine pouches have surged in popularity among conservatives and tech workers as a cleaner alternative to cigarettes, reflecting a growing consumer demand for smoke-free options, especially following the Trump administration's easing of restrictions on nicotine products.
- Cultural Impact: Zyn has become a cultural marker in conservative politics, with former Fox News host Tucker Carlson promoting the brand, highlighting its influence not only in the nicotine market but also in political and social contexts.
See More
FDA Grants First MRTP Orders for ZYN Nicotine Pouches
- Risk Reduction Authorization: The FDA has granted MRTP orders for 20 variants of ZYN nicotine pouches, allowing PMI to market claims that using ZYN lowers the risk of mouth cancer and heart disease, marking a significant milestone in the industry.
- Market Impact: PMI CEO Stacey Kennedy stated that this decision provides over 45 million legal-age nicotine consumers with scientific evidence, ensuring they have access to accurate information that promotes healthier choices.
- Product Innovation: As the first nicotine pouch authorized by the FDA, ZYN underscores PMI's leadership in tobacco alternatives, which is expected to drive future market share growth for the company.
- Consumer Behavior Change: FDA evaluations indicate that over 50% of ZYN users reported no cigarette consumption in the past 30 days, with 80.7% reducing their cigarette use, demonstrating ZYN's effectiveness in reducing smoking behaviors.
See More
Altria Group: A Stable Income Investment Choice
- High Dividend Yield: Altria currently boasts a forward dividend yield of 5.9% and has raised its quarterly dividend for 57 consecutive years, making it one of the so-called 'Dividend Kings', which underscores its appeal and stability for long-term investors.
- Low Volatility Feature: With a five-year monthly beta of 0.50, Altria's stock exhibits only half the volatility of the S&P 500 index, making it an ideal choice for low-risk investors during market fluctuations.
- Industry Resilience: Operating in a sector with inelastic demand, Altria's business model allows it to maintain stable revenue streams even during economic downturns, although future earnings and dividend growth heavily depend on the success of its pivot to non-combustible tobacco products.
- Portfolio Anchoring: While Altria is a top choice for low-volatility investors, it is advisable for investors to include other stocks with strong defensive and dividend growth records in their portfolios to ensure steady income even during market downturns.
See More
Altria Group: A Steady Income Blue Chip Stock
- High Dividend Yield: Altria Group currently boasts a forward dividend yield of 5.9%, having raised its quarterly dividend for 57 consecutive years, demonstrating its stability and appeal as a long-term investment.
- Low Volatility Feature: With a five-year monthly beta of 0.50, Altria's stock price volatility is only half that of the S&P 500 index, making it an ideal choice for low-volatility investors.
- Industry Resilience: As a leading player in the tobacco industry, Altria exhibits strong performance during economic downturns due to the inelastic demand for its products, allowing it to maintain stable cash flows amidst market fluctuations.
- Diversified Investment Advice: While Altria is a top choice for low-volatility investors, it is recommended that investors also consider other defensive stocks to enhance the stability and income potential of their portfolios.
See More
Philip Morris Receives FDA Authorization for ZYN Sales
- FDA Authorization Milestone: The FDA has issued Modified Risk Tobacco Product (MRTP) orders for 20 ZYN nicotine pouch variants, enabling PMI to market claims of reduced risks for several diseases, marking a significant achievement in the company's smoke-free innovation leadership.
- Diverse Product Range: The FDA's orders include various ZYN flavors such as Cool Mint and Peppermint, available in 3 mg and 6 mg strengths, enhancing PMI's product portfolio and catering to diverse consumer preferences in the nicotine market.
- Strong Scientific Basis: The FDA's review highlighted that nicotine pouches deliver nicotine without burning tobacco, significantly reducing harmful chemical exposure, with data indicating that many adult smokers switching to ZYN reported no cigarette use in the past 30 days.
- Positive Market Outlook: PMI estimates that by December 31, 2025, over 43 million legal-age consumers will be using its smoke-free products, projected to account for 43% of Q1 2026 net revenues, indicating robust growth potential in the smoke-free product market.
See More
Philip Morris Secures FDA Approval for Zyn Modified Risk Claim
- Regulatory Support: Philip Morris has received FDA approval to market Zyn nicotine pouches with a modified risk claim, indicating a lower risk of tobacco-related diseases compared to cigarettes, which will enhance brand recognition and sales potential for Zyn.
- Product Range: The FDA allows 20 Zyn products to be marketed with a modified risk claim, emphasizing their advantages in reducing risks of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis, further solidifying Zyn's position as a safer alternative.
- Market Outlook: Following the FDA's initial approval for Swedish Match to sell Zyn products in January 2025, this new authorization enables them to be marketed as a safer alternative to cigarettes, likely boosting Zyn's market share in the rapidly growing smokeless product segment.
- Investor Reaction: Despite the positive implications for Zyn's market prospects, Philip Morris's stock fell by 0.85% on the day, ending a five-day winning streak, reflecting market caution regarding the overall outlook for the tobacco industry.
See More
FDA Approves Zyn Nicotine Pouches as Lower-Risk Products
- Regulatory Win: The FDA's approval for Philip Morris's Zyn nicotine pouches to be marketed as lower-risk than cigarettes represents a significant regulatory victory for the tobacco giant, particularly as cigarette sales continue to decline in the U.S.
- Health Claims: This decision allows 20 Zyn products to claim that switching to Zyn reduces the risk of mouth cancer, heart disease, and other smoking-related illnesses, providing Philip Morris with a powerful health-related marketing tool to enhance the acceptance of smoke-free products.
- Market Trend: Zyn nicotine pouches have surged in popularity among conservatives and tech workers as a cleaner alternative to cigarettes, reflecting a growing consumer demand for smoke-free options, especially following the Trump administration's easing of restrictions on nicotine products.
- Cultural Impact: Zyn has become a cultural marker in conservative politics, with former Fox News host Tucker Carlson promoting the brand, highlighting its influence not only in the nicotine market but also in political and social contexts.
See More
