More than any of the big three tobacco stocks, which includes Altria (NYSE: MO) and British American Tobacco (NYSE: BTI), Philip Morris International (NYSE: PM) has found success in next-gen, heated-tobacco products.

In 2023, 36.4% of its adjusted-net revenue came from smoke-free products, up from 32.1% in 2022, and most of those sales came from IQOS, its heat-not-burn product, which now has 28.6 million users out of its total of 33 million smoke-free product users.

It also generated more than 40% of its gross profits from smoke-free products, showing the category is not only growing quickly but also delivering strong margins.

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Source Fool.com