Philip Morris International (NYSE: PM) is the world's second-largest tobacco company, controlling 28% of total non-U.S. and China tobacco sales. Its flagship brand, Marlboro, accounted for about one-third of total shipments in 2011.

Today, let's look at three things investors should be watching regarding Philip Morris International, as they will provide us better insight into the company.

1. Legal ramifications
Nothing is scarier for tobacco investors than the increasing probability of legal actions or sanctions against tobacco companies. Within the United States, both Altria (NYSE: MO) and Reynolds American (NYSE: RAI) are reducing their workforce by double digits in response to lower cigarette volumes in the United States. The Food and Drug Administration and Centers for Disease Control and Prevention have also combined to make growth difficult for U.S. tobacco companies by focusing on anti-smoking and educational campaigns.

For Philip Morris International, things are markedly different, but they still bear watching. Because it has operations in more than 180 countries, Philip Morris' legal risks are spread globally and therefore relatively minimal. Let's also face the fact that smoking laws are almost always less strict outside the U.S. (although there are a few exceptions). With more amicable smoking laws internationally, Philip Morris is set up for international success, although you should always keep an eye on potential legal issues.

2. Keep your eye on Asia
Make no mistake about it, tobacco companies can smell the growth in Asia and they are willing to fight tooth-and-nail to get their piece of the pie. A rapidly growing young population of smokers has Philip Morris going toe-to-toe with China's state-run China National Tobacco and British American Tobacco (NYSE: BTI), with all three having success thus far in the region.

British American Tobacco's Asia-Pacific region totaled 28% of its revenue in 2011, up from 25% in 2010, while adjusted profits in the region rose 15.5%. Philip Morris has also been privy to rapid growth in the region, but its latest quarter demonstrated a slight hiccup. The company was up against very tough comparisons related to the earthquake in Japan in March 2011, and was forced to lower its EPS forecast due to unfavorable currency translations. However, make no mistake about it, this is a three-way battle in the Asian-Pacific, and Philip Morris has a strong brand and well-known name within the region.

3. It's the dividend, stupid!
You might be thinking the final thing we should keep an eye on is brand development or non-tobacco product development, but outside of the United States those factors aren't as important.

Instead, tobacco investors should keep an eye on what really matters to them: the dividend. At 3.4%, Philip Morris' yield isn't anywhere near the highest in the tobacco sector. U.S.-based Lorillard (NYSE: LO) has grown its dividend by 68% in just the past four years while boosting its yield to 4.9%. Similarly, Altria and Reynolds American offer yields of 4.6% and 5%, respectively.

The thing to remember with Philip Morris is that you'll receive a smaller yield, but it's also a safer payment considering the smaller chance of legal action being taken against the company relative to its U.S. counterparts, which spend quite a lot on legal expenses. I also wouldn't overlook the fact that over the past four years, Philip Morris' payout has jumped by a not-too-shabby 67%.

Foolish roundup
Now that you know what to watch for, it should be easier to analyze Philip Morris International's successes and pitfalls in the future, and hopefully you'll gain a competitive investing edge.

If you're still craving even more info on Philip Morris International, I would recommend adding the stock to your free and personalized Watchlist so you can keep up on all of the latest news with the company.

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