Source: Philip Morris

Long-time investors in Philip Morris International (NYSE:PM) were quite pleased with the tobacco giant's performance after its spinoff from former parent Altria Group (NYSE:MO) in 2008, with the stock soaring after the financial crisis and taking full advantage of its global opportunity in a growing industry. Yet since last year, Philip Morris has fallen back from its record highs, and some shareholders worry that the headwinds that have hit its business recently could continue well into the future. Still, those who still believe in Philip Morris International's potential can point to several factors that could help its stock regain its past heights and move into record territory once again. Let's look at three of those factors and how they could push Philip Morris stock higher.

1. Philip Morris International's dividend yield gives it a competitive advantage over major domestic producers.
For a long time, Philip Morris International's valuation reflected the belief that the international tobacco business had greater growth potential than the U.S. market. With heavy regulation domestically, that assumption seemed valid. Yet one of the things that has held Philip Morris back is that foreign governments have started looking at the efforts of U.S. regulators and mimicked them to varying degrees, and that has weighed on cigarette volumes in certain areas. Even as Altria and other domestic tobacco producers have seen their shares advance, Philip Morris hasn't participated.

Source: Philip Morris.

As a result of Philip Morris' stock-price stagnation, its dividend yield of 4.5% is now well above what Altria, Reynolds American (NYSE:RAI), and Lorillard (UNKNOWN:LO.DL) pay. Moreover, Philip Morris management has committed to keeping the dividend as a high priority, asserting its intention to return 100% of free cash flow to shareholders in the form of dividends or share buybacks. Given that Philip Morris has more than doubled its dividend payout since 2008, investors have reason to believe that the tobacco company will make good on its promise.

2. A less-bad decline in the international cigarette industry could be enough to send Philip Morris higher.
The pessimism over falling cigarette volumes and other headwinds has been one key reason why Philip Morris stock has performed badly in the recent past. Yet now that expectations are so low, Philip Morris could well give investors a positive surprise even without demonstrating the long-term viability of the tobacco industry.

For instance, in its most recent guidance, Philip Morris said that it expects cigarette volume to fall by 2.9% in 2014, excluding the U.S. and China. Yet next year, the company believes that volume declines will slow to between 1% and 2%, a rate that more accurately reflects the long-term trends in the industry. Setting the bar so low means that all Philip Morris would have to do to impress its investors is to manage to hold its business steady on a volume basis. With gains last quarter in cigarette volume in the European Union as well as Eastern Europe and Africa and the Middle East, Philip Morris could manage to achieve that feat despite the difficult conditions that have held back growth in Asia and Latin America.

3. The rollout of iQOS could be a game-changer for Philip Morris.
With the long-term future of traditional tobacco products in doubt, many growth investors have looked at efforts to introduce electronic cigarettes and other alternatives to traditional tobacco products. Philip Morris has moved aggressively on that front, with its launch of the Marlboro HeatSticks system in Italy earlier this month. With a similar launch in Japan having done well in its early stages, Philip Morris hopes that it can woo back customers who prefer products other than regular cigarettes.

Source: Philip Morris

To be fair, there's a lot of doubt about the viability of alternative products in the tobacco industry, with the potential for regulators to start adding new restrictions on e-cigarettes and vapor products that would eliminate much of their competitive advantage over regular cigarettes. Nevertheless, Philip Morris is pressing hard to make sure that the trend toward innovative new ideas on the industry doesn't pass it by, and by doing so, it could score a big win if alternatives remain popular and grow in the years to come.

Philip Morris International is still a good distance below its all-time record highs. But if the company can reignite its past growth, then the stock could easily see its price climb upward for the rest of 2014 and beyond.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.