Lorillard Commands More Market Share In A Shrinking Tobacco Market

Source from:  Citybizlist Charlotte/Raleigh 09/21/2011

U.S. tobacco stocks have luxurious yields. Yet, a big problem lurks: Cigarette companies are in a declining business. Americans are smoking less. Surprisingly, earnings have held up well, and are, in many cases, rising. Still, although those juicy dividends beckon, tobacco should look for companies bucking the trend and actually selling more product. Look no further than Lorillard (LO), maker of Newport cigarettes. Despite a sagging tobacco industry, the company has boosted its market share. In 2006, Lorillard had a 9.6% share. Every year since, it's increased its slice. Now it owns 14.2% of the domestic market, largely because it dominates menthol, where it has almost a 40% share. This company is looking to take bigger hunks out of a smaller cigarette pie. In contrast to Altria (MO), Reynolds (RAI), and Vector Group (VGR), Lorillard's business is expanding. Lorillard is selling more cigarettes, something no other domestic tobacco has been able to do. Enditem