May 6, 2012
The following video is part of our "Motley Fool Conversations" series, in which consumer-goods editor and analyst Austin Smith and energy editor Joel South discuss topics around the investing world.
Looking at the consumer-goods sphere, Austin sees an interesting trend in Big Tobacco toward smokeless tobacco products and less harmful smoking alternatives. Combine the fact that domestic smoking rates continue to decline and many manufacturers continue to realize volume difficulties, and it's tempting to say that the age of Big Tobacco is over. Austin doesn't think this is the case at all and still sees cigarette manufacturers being highly profitable and stable companies with great dividends. Moves like Lorillard's acquisition of bluCigs aren't real needle-movers yet. They are bricks being laid for a future that's still a long way off, but they do give cigarette companies more options down the road.
At the end of the day, though, the tobacco space is still highly profitable -- you just have to go abroad. Many American companies are realizing this, and they've seen huge success in doing so. You can read about "3 Companies Set to Dominate the World." in our new analyst report. It's totally free, and you can read about them by clicking here now.