![]() Tobacco is an incredibly high margin business. There might not be an industry that is more divisive, controversial, but profitable than “Big Tobacco”. The tobacco business itself is a truly unique business model. Tobacco Cash Flows Drive A Wonderful Dividend We will talk about each as their own topic below, but they currently co-exist to drive revenue growth for Philip Morris. This effort has created an interesting balance between the company’s legacy cigarette business, and the emphasis on reduced risk products such as IQOS that are going to sustain the company over the decades to come. We will talk about IQOS in its own discussion later on, but I want to note ahead of time that Philip Morris International is aggressively pushing reduced risk products in its markets as it tries to transition away from traditional cigarettes. These include Marlboro (the leading tobacco brand in the world), L&M, Chesterfield, Philip Morris, Parliament, and its in-house developed reduced risk products IQOS and IQOS Veev. Philip Morris International does about $29 billion in annual sales.Īs a result of this spin off, Philip Morris markets and distributes a handful of tobacco product brands to its global market base. Philip Morris was part of Altria Group ( MO ) prior to 2007 when the combined entity’s international business was spun off to operate on its own under the Philip Morris International name. Philip Morris sells tobacco products into roughly 180 markets around the world, the United States not being included in that. Philip Morris International is the world’s largest publicly traded tobacco company, and third largest tobacco company by revenue. We will drill into Philip Morris, and outline the thesis that makes Philip Morris the best tobacco stock for the next 25+ years. Additionally, its broad geographic footprint gives it a diverse business that is poised to continue growing for years to come. Philip Morris International ( NYSE: PM ) is a leader in bringing nicotine consumption to the future via reduced risk products. While increasingly fewer cigarettes are consumed each year, the future isn't necessarily bleak for all of the industry's players. Tobacco has been a resilient industry for centuries, but these days the story around tobacco stocks is all about transitioning to the future. Photo by Tatyana Berkovich/iStock Editorial via Getty Images
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