With its popular Marlboro brand, Phillip Morris has generated gargantuan levels of profit over the last 100 years. This left two publicly traded companies -- Altria Group (NYSE: MO) and Phillip Morris International (NYSE: PM) -- that investors could own for exposure to the brand. Currently, investors are very pessimistic about Altria's future.
Instead, investors on balance have been circling back to companies with lengthy operating histories, solid free cash flow, and proven business models. Tobacco giants Altria (NYSE: MO) and Philip Morris International (NYSE: PM) are prime examples of this evolving value tilt. Thanks to their well-above-average dividend yields (8.45% and 5.26%, respectively), these legacy tobacco companies have generated total returns on capital far in excess of the broader markets over the last 18 months.
Constellation Brands' (STZ) Q4 results are expected to benefit from strength in the beer business, its premiumization strategy and growth of high-end Power Brands.