Sin Stocks That Sizzle: Altria (MO)
The world’s biggest tobacco company, manufacturer of Marlboros, and parent company of Philip Morris USA (PM) saw fourth-quarter profit jump 32% after boosting prices for Marlboro cigarettes. Net income rose to $1.1 billion from $836 million a year earlier.
Altria (MO) tends to dominate its market segments. One global market research agency estimates the world market value of the Marlboro brand at $67.5 billion, behind only Cola-Cola (KO) and AT&T (T). Altria’s cigarette segment commands 50% of the U.S. market.
Total market penetration for Marlboro alone is 42%, while Altria’s lesser-known brands – Merit, Virginia Slims, Parliament, and Benson & Hedges – make up the remainder. Despite experiencing a continued drop in domestic consumption, and despite higher “sin” taxes, Altria’s stock price has managed to increase six-fold since early 2000. It also generates a healthy 5.2% dividend.