The full corporate story of Philip Morris is complex but the outstanding performance of its stock makes it worth looking into.

Investing in Atria may not have been the most ethical choice but it would have been a financially sound decision. How much your investment in Philip Morris Companies would be worth today is very complicated due to the number of spinoffs, mergers, splits, and IPOs. I'm a big fan of history and business.

I've been researching multibaggers and along the way, I've decided to write some articles. So far, the feedback has been amazing. Here are my first two articles in the multibagger series. The best part about writing these articles are the comments. I love reading people's stories. In my previous article, one commentator suggested I write an article on Philip Morris Companies Inc. At first, even though I knew the tobacco industry was a money-printing machine, we don't talk about Philip Morris in the same conversation as the Facebook NASDAQ: FB and Netflix NASDAQ: NFLX of this world.

That is, companies that made people very rich. My first two articles were about two high-tech stocks that changed people's lives for the better - Apple NASDAQ: AAPL and Microsoft NASDAQ: Philip Morris' products are not known to make life better.

I see a couple of reasons why the Altria Group is not lumped with the "cool" high return companies. The first reason is that the tobacco industry is boring. Second, when you think of Philip Morris, you think of big fat reliable slowly growing dividends, not an innovative company with amazing growth prospect. The suggestion to write about Philip Morris led me to research it and I liked what I saw. Altria also owns 9.

It's a pretty diversified group but it's mostly known for its cigarettes and its Marlboro brand. I bring up the dividends early on because it has been such an important contributor to its performance. Altria has increased its dividend 51 times in 48 years. The dividends have turned Altria into a dominant investment. It has been a favorite of dividend investors for a long time, as the company has consistently made healthy payouts to its shareholders. The company has provided the killer combo: There's a reason why it was called Philip Morris Companies Inc.

In addition to the U. There are many layers to this. For an idea of the complexity, just take Kraft for an example. After Philip Morris bought Nabisco Holdings, it combined General Foods, Kraft, and Nabisco Holdings into one company called Kraft Food.

Then there was the IPO of Kraft inits spin-off in and a split in two companies in with the other half becoming Mondelez International. Then in Kraft was acquired by Heinz.

Then I have to calculate the appropriate cash dividend from all the subsidiaries because Philip Morris International was spun off too and in this case Altria was the much smaller company. This can be a messy exercise. What's clear is that long-term shareholders of the Altria Group have been very well rewarded. Even though that over time, Kraft and Philip Morris have rewarded their shareholders in their own unique ways, for simplicity's sake, I focused solely on the Altria Group even though the "full complete" investment performance would be much higher.

Unfortunately, when it came to calculating its performance, I couldn't go back all the way to when it was first publicly available to the public and was majority owned by the Tobacco Products Corporation.

I spoke with investor relations and they didn't know what their investment return was since So I had to use the data available to me. The earliest I could go back is November 23, That's as far as Altria would go. However, historical closing prices and dividend payments for Altria dating back to the early s are available on Yahoo Finance.

That's fine since we can reasonably assume that a long-term shareholder wouldn't have acquired his shares in That's also essentially a working lifetime. However, it's reasonable to assume that one could have held shares for twenty or thirty years. New York Times, February 14, The following calculations are with the help of Altria. Since then there have been many splits.

My one share would have turned into 96 shares. There was a 2 for 1 split in, anda 4 for 1 split ina 3 for 1 split in It's possible there were splits before the s but the data are extremely difficult to come by.

Investing in Atria may not have been the most ethical choice but it would have been a financially sound decision, and more. I'm not the only one who ran the numbers.

Wharton finance professor Jeremy Siegel, who probably has better access to data than me, cites in his book The Future for Investors: Why the Tried and True Triumph Over the Bold and the New released inthat Altria has the best performing stock I would have thought Exxon-Mobil.

That beat the average stock by 7. Siegel's conclusion is that it's not the hot, new-industry stocks that serve investors best. Most often it's the humdrum, traditional firms that sell cigarettes, pump oil or peddle soft drinks and chewing gum.

What about the cool high growth disruptive companies? These higher prices meant lower dividend yields and therefore fewer shares accumulated through reinvesting dividends. How many times have we heard that? In a widely circulated research reportpublished by Credit Suisse looked at the performance of every major American industry from to What do you think the best performing industry is? No, none of those.

There's an industry with barely any changes crushing all the other sectors. Thanks to the addictive allure of tobacco. Distinguished writer Morgan Housel partner at The Collaborative Fund and a former columnist at The Motley Fool and The Wall Street Journal explores the subject in more detail in one of his articles.

I talked a lot about the historical returns but what about lately? Think about this for a minute. Apple has to work its behind off to release new innovative products to win investors and consumers. And yet all Altria needs to do is to keep pumping the same old cigarettes.

Philip Morris was a British tobacconist and fine cigars importer. Inhe opened a single shop on London's Bond Street. Morris was both a manufacturer and merchant of the newly popular product.

In doing so, he laid the foundation for what is now one of the leading tobacco companies in the world. Morris saw an opportunity when British soldiers returning from the Crimean War were craving Turkish style cigarettes. Inhe made his first cigarettes and was known as "Philip Morris English Ovals. Morris's death, the business was taken over by his family. Today's listed stock has nothing to do with the original IPO.

This was a partnership between Leopold Morris, the brother of Philip Morris, and Joseph Grunebaum. Philip Morris was taken over by William Curtis Thomson and his family. Today's stock has nothing to do with the London IPO. Ownership was split between the British parent and American partners. Supreme Court broke the tobacco cartel into 4 competitors - American Tobacco, R.

The roots of the current Altria stock can be traced back towhen Tobacco Products Corporation led by George J.

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Whelan, formed inwas created to absorb a few of the splinter companies not already organized into the new Big Four of tobacco. Tobacco Products Corporation purchased the U. Up to this point Philip Morris is majority owned by the shareholders of Tobacco Products Corporation until its collapse in Ellis and Leonard B.

McKitterick were two executives and shareholders of Tobacco Products Corporation when they took over Philip Morris. McKitterick were veteran salesman and experienced at marketing.

InEllis also introduced a new premium of a 20 cents a pack cigarette called Marlboro. Thanks to excellent marketing, strong sales and acquisitions Philip Morris climbed its way to the top of the cigarette world.

Inthe company had become a part of American culture and soon after it launched Philip Morris International formerly called Overseas Division to manufacture and market its products around the world.

Philip Morris only really started to dominate the global cigarette industry once the Marlboro Man campaign took off. The first version of Marlboro cigarettes s - Source: You can't write an article about the success of Philip Morris without mentioning the contribution of Marlboro. Marlboro is the flagship tobacco product of the Altria Group and the number one selling cigarette in the world since how to make money on peoplestring Lucky Strike is in 2nd place with Inwhat was to become Phillip Morris' most famous brand, Marlboro, was introduced.

It was named after the street its London factory was on, Marlborough. Marlboro did well from the beginning and leveled off at steady sales of million cigarettes a year. Industry leaders such as Camel and Lucky Strike sold more than 25 billion a year. With the slogan "Mild As May," Marlboro was originally marketed to women, the wealthy, and the sophisticated, in complete contrast to its cowboy-image reincarnation.

InMarlboro cigarettes had a greaseproof ivory tip to prevent women's lipstick from smearing; ina red "Beauty Tip" to hide unsightly lipstick smudges. When Marlboro was targeted to women. In the s, health reports started coming out on the health hazards of smoking which led to smokers "modifying" their smoking habit.

The cigarette industry began to focus on promoting filtered cigarettes, as a response to the harmful effects of smoking. Philip Morris somehow failed to foresee the most important new development in the cigarette business in many years: The introduction of milder and less harmful filtered cigarettes.

It was not until that the company repositioned its old filter entry, Marlboro, as a cigarette with broad appeal by working the myth of the American cowboy futures commodity brokers directory the product's marketing strategy.

It took time, however, for the new Marlboro image to take hold, and byMorris had slipped to sixth and last place among major U. It appeared that changing consumer preference had left Morris well out of the new era in tobacco. Since Marlboro was a feminine cigarette, you needed something radical to change its image. Enter the Marlboro Man. The Marlboro Man was first conceived by Leo Burnett in The images initially featured rugged men portrayed in a variety of roles but later primarily featured a rugged cowboy or cowboys, in nature with a cigarette.

But inPhilip Morris wanted a real cowboy and hired Darrell Winfield for a year run as the Marlboro Man. The Marlboro advertising campaign is said to be one of the most brilliant advertisement campaigns of all time.

That campaign built Marlboro into a global brand and by became stock market uranium prices number 1 selling cigarette. InPhilip Morris overtakes RJ Reynolds to become the number one U. The Marlboro Man campaign retired in after the Tobacco Master Settlement Agreement forex fx traders forum singapore public cigarette billboards in how to earn smoola in magic piano cheat U.

From a position of relative obscurity in the cigarette business in the early s, Philip Morris has ridden Marlboro's success to leadership of the world tobacco market, while battling legal problems surrounding the entire tobacco industry. Marlboro leads Altria's cigarette product portfolio. These brands are among the nation's best-selling cigarette brands.

InPhilip Morris USA's retail cigarette share was Today, Marlboro is still one of turkish companies listed on nyse most powerful trademarks.

In addition, it has been the world's number one cigarette brand since There's even a movie that played a version of the Marlboro Man by Don Johnson in Harley Davidson and the Marlboro Man a play on two brand names synonymous with masculinity. At one point, you could get your nicotine fix, your alcohol, and cheap carbs all from the same company. Philip Morris was a tobacco and food giant. It even owned 7-Up at one point but sold it to PepsiCo NYSE: PEP since they didn't have success with it.

Here's a brief history of Philip Morris' adventure in the junk stock market modelling java. Let's start with the beer. InPhilip Morris bought Miller Brewing. Miller was then only the 7th largest brewer in the United States.

A stockland townsville show day trading hours has happened in the beer industry since and merits its own article. Today Day trading options by jeff augen pdf and Miller are now together.

That's like saying Coca-Cola NYSE: KO and Pepsi are one company. Altria now owns , restricted shares of Anheuser-Busch InBev, representing a 9. Marty Barrington, Altria's Chairman, CEO and President, and Billy Gifford, Altria's CFO, have been appointed to AB InBev's Board of Directors.

Billy Gifford, the CFO, commented, "The transaction allows Altria to continue its participation in the global brewing profit pool as a significant shareholder in AB InBev, and we are excited about the prospects for the long-term value of our investment.

InPhilip Morris purchased General Foods. Reynolds was also diversifying its activities by buying Nabisco Brands, forming RJR Nabisco. The deal to turkish companies listed on nyse day is very iconic. There's an excellent book on the subject: Barbarians at the Gate: The Fall of RJR Nabisco.

RJR Nabisco ended up being broken up and Nabisco Holdings was then bought by Philip Morris in After this purchase, Philip Morris combined General Foods, Kraft, and Nabisco Holdings into one company called Kraft. InAltria spun-off 1. You would need to add the spin-off of Kraft and Philip Morris International.

The beer business is also not mentioned. The Future for Investors: Why the Tried and the True Triumph Over the Bold and the New by Jeremy Siegel. While traditional tobacco volumes have been facing declines, Altria may be presented with a big forex cargo bahrain address in the marijuana market.

This could be the next big industry. Weed could also be a threat or an opportunity. Tobacco companies are investing millions into research for entering the marijuana industry should it become legal on a federal level. Tobacco companies already taxes realestate earnest money contracts how to operate and make money in a highly regulated industry, and marijuana will likely be that.

Documents from the s revealed that former executives at companies such as Philip Morris began looking into both the threat of and opportunity in cannabis in anticipation of it becoming legalized by the U. Philip Morris has been so eager to profit from legalization that it sought a French trademark and intellectual property rights for the name " Marley " - as in Bob Marley - in Altria subsidiary Nu-Mark is one of the world's leading manufacturers of electronic cigarettes, signaling that its entry to the cannabis market could look less like cigarettes and more like the healthier alternative, vaping.

Also in Nu-Mark bought e-vapor manufacturer, Green Smoke. I know it's just speculation, but the logo and name suggest a subtle move into pot. Even though Altria is quiet about it, it is obvious that they and big tobacco are looking into this.

There's no way they are standing still. This could alex hope a rotund 24-year-old currency trader a massive growth opportunity or threat if they don't get involved. Could be that big tobacco becomes big marijuana also?

In the last few decades, the general world opinion regarding smoking cigarettes has changed a lot. Before, smoking was considered to be sexy and cool, but today, smoking is seen as an unhealthy and unwanted habit.

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Even against this, Altria has managed to sustain revenues, predominantly aided by price hikes and lower gas prices. Five years ago, U. Because half of tobacco sales occur at the gas station, according to Euromonitor, low gas prices tend to boost cigarette sales, leaving consumers extra money to buy more packs or higher-quality cigarettes. However, this strategy may be constrained beyond a point, since further price hikes could exacerbate the volume decline in a way that revenues actually start falling.

Cigarette smoking is expected to further decline. Young people aged between years old have the 2nd lowest rate of smokers among adults with Only people over the age of 65 smoke less 8. See figure below for stats. Let's break this down to simple matters: Altria needs people to buy cigarettes to make money.

There's a social fight to stop people from smoking. In North America, smokers are "persecuted" can't smoke in public space etc…. The key to future profits is winning the youth. It's no secret that youth who use multiple tobacco products are at higher risk for developing nicotine dependence and might be more likely to continue using tobacco into adulthood source. If you can make through high school without smoking, you will be fine, but that is not good for Altria.

How can Altria and big tobacco fight off the trend? Is the answer marijuana? Despite all the issues related to smoking, Altria Group has provided in the past both a lot of growing income and capital appreciation. Over time, it had one of the best long-term track records in the stock market.

What about the future? What can a shareholder expect? What has been good for longtime Altria shareholders isn't necessarily as good for those looking at the stock now for the first time.

Altria's litigation risk might be far less than it was 10 or 20 years ago, given how many legal issues have already been resolved. Even though smoking rates have been declining for decades, tobacco companies are facing new competition in the form of e-cigs, vapors, and the legalization of marijuana.

On the other hand, all these threats also represent potential opportunities. There is also the issue of taxes. While similar ballots to raise cigarette taxes failed in Colorado, Missouri and North Dakota, it's clear that the trend is going the way of higher taxes.

Why is this important?

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Although the effects are not immediate because cigarettes are an inelastic product, higher price per pack has led to a decline in smoking. There are also rumors if British American Tobacco and Reynolds American merge, a Philip Morris International and Altria merger would not be far behind? Analysts don't believe Philip Morris would idly sit by and believe this increases the probability that Philip Morris could acquire Altria. At the time of the split, the U.

But things have changed since then, and the rationale that justified the separation no longer exists. They've already begun working more closely together in recent months, joining forces to develop new products such as iQOS, electronic-vapor cigarettes. It would also make it easier and cheaper to launch the iQOS smokeless cigarette. E-cigs use liquids that contain nicotine and other ingredients.

By contrast, iQOS uses specially formulated HeatSticks, which are made of tobacco and mimic the content of actual cigarettes. Yet rather than burning the tobacco, iQOS heats it up, producing a vapor that users can inhale in the same way they would a regular cigarette. Philip Morris International has already rolled out the product in international markets and early results look promising.

When I asked Altria's investor relations department about the product, they wouldn't comment other than saying it was at the research stage. I don't know what the future holds. I can't tell if Altria will be able to raise dividends for the next twenty years.

Maybe the same concerns were raised in the 80s and 90s and look how wrong everybody would have been. Altria Group has had one of the best long-term track records in the stock market, and its dividend has played a huge role in giving investors the income and total returns that they want. Whether you would have owned Altria, Philip Morris International, and Kraft, you would have done very well with those positions.

Like Jeremy Siegel said, it's not the hot, new-industry stocks that serve investors best. More often it's the humdrum, traditional firms that sell cigarettes, pump oil or peddle soft drinks and chewing gum. I'm in favor of legal marijuana for medical and recreational use, and I love big dividends. I wrote this article myself, and it expresses my own opinions.

I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article. REITs Dividend Ideas Dividend Strategy Dividend News Dividend Quick Picks Editor's Picks. Summary The full corporate story of Philip Morris is complex but the outstanding performance of its stock makes it worth looking into. One share of Philip Morris in is equal to 96 shares today! Marlboro Man, Hollywood California.

Apple Computer's IPOa bagger without calculating dividends The Microsoft Millionairesa bagger since its IPO The best part about writing these articles are the comments. Altria Group I bring up the dividends early on because it has been such an important contributor to its performance. New-York Times, May 23, Performance The full corporate story of Philip Morris is complex but the outstanding performance of its stock makes it worth looking into. Today you can follow many of Philip Morris' companies: InAltria Group spun off its non-US tobacco business, Philip Morris International NYSE: PM to its shareholders.

Altria investors received Philip Morris shares on a 1-for-1 basis. The reason for the split was to set free the faster-growing overseas operations while the U.

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It markets and sells its products in approximately countries. Kraft Food is now The Kraft Heinz Company NASDAQ: Mondelez International MDLZ is still a standalone company. The IPO was in and was the spin-off in New York Times, February 14, The following calculations are with the help of Altria. Who is Philip Morris? Initial store on Bond Street. Altria There Was A London IPO Today's listed stock has nothing to do with the original IPO.

Sammleraktien The roots of the current Altria stock can be traced back towhen Tobacco Products Corporation led by George J. Marlboro The first version of Marlboro cigarettes s - Source: Altria Group Marlboro leads Altria's cigarette product portfolio.

IMDB Junk, Junk, and more Junk At one point, you could get your nicotine fix, your alcohol, and cheap carbs all from the same company. Google Images Now the food part: Why the Tried and the True Triumph Over the Bold and the New by Jeremy Siegel Marijuana While traditional tobacco volumes have been facing declines, Altria may be presented with a big opportunity in the marijuana market. The Decline of Smoking In the last few decades, the general world opinion regarding smoking cigarettes has changed a lot.

CDC Let's break this down to simple matters: What's Next for Altria Shareholders? Want to share your opinion on this article? Disagree with this article?

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