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People are just now beginning to warm to the split of
, and it's about time. Both companies are kicking butt in a declining market, with the domestic company, Altria, raising price and taking share -- neither of which is in the numbers -- and
Philip Morris International
just consistently growing in emerging market areas.
Both companies have the potential for gigantic buybacks as a way to reward shareholders, and the dividend on MO can be increased very easily, as there was a lot of money just sitting in the bank because of no more litigation risk.
We just got a new wrinkle to the Altria story that's not in the numbers: the joint venture of SABMiller with
features in this morning's front-page story. This is a great one, one where the market share gains are staggering in a stagnant industry. Coors Light is up 5.4% and Coors Banquet is up 6% even as Miller is down. However, when the joint venture gets integrated, I think you will see more marketing muscle and higher share for both companies.
Either way, you have to recognize that the initial selling is now over and the two stocks are getting more and more sponsorships after some initial downgrades, as people thought the story was played out.
I own them both for
and can't see why you wouldn't want to own at least one of these two key names, the growth-oriented PMI or the stable, value play of MO. Something for everybody.
At the time of publication, Cramer was long Altria and Philip Morris International.
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