During the past year, this company earned $8.6 billion in profits. It only distributed $4.6 billion in dividends. In other words, it could see its earnings fall more than 45% and still be able to maintain the dividend.At the same time, this company's stock has seemingly ignored the ups and downs of the past few months. Instead, it has steadily beaten the market in the past year. Just take a look at the chart.
But let me tell you, it's not the billions of dollars in earnings that cover the dividend payment or strong performance in a rocky market that make me think this is one of the safest dividend stocks in the world.
It's how this company makes money that makes it so stable.
You see, when the economy is strong, people don't have a problem buying high-tech gadgets or spending bundles on luxuries. But as soon as the economy starts to head south, these expenses are the first to be cut.
But there are some goods that people always buy, regardless of the economy. These "necessities," and the companies that make them, often perform well -- even during times of financial uncertainty.
Take cigarettes for example. It doesn't matter much what the economy is doing, people will still buy cigarettes. That's good news for cigarette makers like Philip Morris International (NYSE: PM), which I think is one of the safest dividend payers on Earth.
Philip Morris International is the world's second-largest tobacco company (behind China National Tobacco) and holds almost 16% of the non-U.S. market. PMI's brands include seven of the world's top 15 names, including Marlboro, the No. 1 cigarette brand worldwide.
This company is a spin-off of Altria's (NYSE: MO) cigarette business outside U.S. borders.