The dynamism and profitability of the tobacco industry is outstanding, leading to high and sustainable dividend payments to shareholders. One of the best companies within the industry is Philip Morris International (PM), the owner of seven of the top 15 cigarette brands in the world, including the top cigarette brand Marlboro. Philip Morris is the second-largest tobacco company in the world, after government-controlled China National Tobacco. Philip Morris has a market capitalization of $136 billion and is traded on the New York Stock Exchange.
Company Profile
Philip Morris International is an American global cigarette and tobacco company, with products sold in over 180 countries and more than 87,000 employees. Its market share of the cigarette market outside of the U.S. is above 16%. Philip Morris was part of Altria (MO) until 2008 when it performed a spin-off of Altria Group. Altria was a conglomerate which had several divisions. Altria sold off its beer unit, spun off the Kraft (KRFT) division as a standalone company, and split the cigarette business into Philip Morris USA, which retained the name Altria, and Philip Morris International. Altria controls the U.S. market, while Philip Morris does all of its business abroad.Philip Morris International producer of LM cigarettes.
Because tobacco, the main constituent of cigarettes, is the single greatest cause of preventable death globally and is addictive, the industry is highly controversial and is increasingly the subject of litigation and restrictive legislation from governments concerned about the health impacts of its products. Therefore, Philip Morris' geographical exposure is a major positive factor especially compared to Altria, as the U.S. tobacco industry has been penalized by litigation for years. On the other hand, the rest of the world does not have the same issues for tobacco companies and Philip Morris simply doesn't have the same litigation costs eating its profits that Altria does, nor does it have the uncertainty of future litigation issues. In 2012, the company held an estimated 16.3% share of the total international cigarette market outside of the U.S. The company has very good geographical diversification, generating about 35.7% of its sales in Asia, 27.2% in European Union, 26,5% in Eastern Europe, Middle East and Africa, and 10.6% in Latin America and Canada

Tom Hanks had to stub out Walt Disney's heavy smoking habit in new movie Saving Mr. Banks due to strict ratings guidelines. Hanks portrays the movie mogul in the new drama, about the battle to bring Mary Poppins to the big screen, but had to omit scenes that featured the animator puffing on cigarettes in order to satisfy censors. The actor reveals producers endured protracted negotiations over the issue, but they were prevented from showing Disney smoking onscreen. Hanks says, "We had a hard enough time trying to have him smoke... If we smoked cigarettes in this movie about Walt Disney making Mary Poppins, it would be rated R (restricted). That's just the way it works. You couldn't believe the negotiations. It came down to us not being able to light a cigarette or inhale a cigarette. "You do see one big scene where Emma (Thompson) as (Poppins author P.L. Travers) storms into my office and you see me putting out a cigarette in the ashtray on Walt's desk. "I did always have a pack of cigarettes in my shirt pocket and sometimes I was playing around with them and a cigarette lighter here and there, but I never could smoke one. "The man smoked three packs of cigarettes a day. People who knew Walt say that you could always hear him coming down the hall, because you'd hear him coughing from smoking all those cigarettes." Disney died of lung cancer in 1966 at the age of 65.

What Makes Altria Group A Good Buy?

The tobacco industry is under the scanner of the FDA on approval of menthol usage in cigarettes. Major cigarette manufacturers will get affected by this decision but not Altria group (MO). It has been able to create a broad product portfolio with large brands in the cigarette category. The company has shown dividend growth rate of 7.3% during last year. In the 2nd quarter of fiscal 2013, it has achieved 5% growth in earnings and reported EPS of $0.62. Now, let's discuss a few points in detail.
Diversification towards smokeless products will drive growth
The smokable cigarettes segment is strictly regulated and with other alternatives available now, this segment is facing decline in consumption. Altria Group is diversifying its product portfolio more towards smokeless products. Chewing tobacco and snuff are two other product categories which are also preferred by consumers. In the 2nd quarter of 2013, smokeless products posted strong results with sales growth of 7.6% and operating margin growth of 12.5%. At present, smokeless products category has ~20% share in the total sales but it will increase with growing Copenhagen and Skoal brands. The company will drive its long term sales growth through its diversified products portfolio. Marlboro cigarettes online.
Pricing can be decisive in margins growth
Altria group has achieved operating margin growth of 1.5% in the smokable cigarette category, despite missing the volume target. It has increased prices to offset the decline in cigarette consumption. The demand of cigarettes is declining and it throws a challenge to the company for right pricing to drive sales growth. As industry trends for volume growth are very low, price-mix along with cost savings in the category will drive margins in the short term.
E-cigarette launch can be growth driver
E-cigarette is another fast growing category and came across as an alternative to traditional cigarettes. E-cigarette is now a worldwide $3 billion category and Altria group is also coming up with a new e-cigarette brand. The company is all set to launch MarkTen e-cigarette in the test markets of Indiana. This is a key innovation for the company and if successful, it will be rolled out across the markets to drive sales growth. This product category has seen better margins, which will help it to establish itself in the emerging markets.

Miley Cyrus and Demi Lovato Touch Joe Jonas Smoke Weed

Miley Cyrus and Demi Lovato Touch Joe Jonas Smoke Weed

Tobacco Plain Packaging New Government Move

Tobacco Plain Packaging New Government Move

Will the FDA Stub Out Menthol Cigarettes?

Here we go again. The FDA is putting menthol cigarettes in its crosshairs again, not because they're any more likely to cause illness than regular cigarettes, but because they can serve as a gateway smoke for kids.
The regulatory agency released its "preliminary scientific evaluation" yesterday and admitted there's little evidence showing menthol cigarettes are any more toxic than non-menthol ones, but that doesn't mean it doesn't think they should be more stringently regulated. Of course, it's "for the children."
Because the mint-flavored cigarettes mask the harshness of tobacco, teenagers may be more willing to start smoking, get addicted, and find it harder to quit. It was one of the reasons that flavored cigarettes, such as those infused with candy, fruit, or spice flavors, were banned back when the FDA was first given regulatory power over the cancer sticks. According to studies, half of all teens prefer menthol-flavored cigarettes, though the FDA itself says 30% of adults and 40% of teens enjoy smoking menthols.