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Are Big Tobacco Stocks a Good Investment?
The question now is: was last week's earning announcement enough to send Philip Morris stock down more than 16% and Altria stock down 8%? More importantly, are they good entry points to buy, and which company is a better buy?
Patrick McDowell, Wealth Manager at Arbor Wealth Management in Miramar Beach, Florida likes Philip Morris. "If you had to choose one of the two, Philip Morris is probably the better buy simply due to the international focus. The data is always tricky but it looks like international smoking is flat to growing slightly while US smoking is slowly declining."
Another potential source of growth (though still just a pipe dream at the moment) is the burgeoning cannabis industry. With legalization nearing reality on the federal level, Big Tobacco companies have the distribution capabilities in place to package and sell marijuana once it's officially legal. "Imagine Marlboro Reds next to Marlboro 'Greens' at the gas station!" joked McDowell.