Altria Group Inc. (NYSE: MO) is going to have more cash on its books now that can go to paying shareholders more dividends rather than paying plaintiffs in lawsuits against the company. Whether this is enough to matter is another issue but Altria won a Minnesota case involving the whole “lights” cigarettes. This case in particular was filed over ten years ago and it represented smokers worldwide who had purchased Marlboro Lights in Minnesota between 1971 and 2004.
Altria noted, “The Minnesota Supreme Court today ended a class action suit against Philip Morris USA in which smokers sought refunds for “lights” cigarettes they purchased… The Supreme Court found that the class’ claims under a Minnesota consumer protection law were barred by the Tobacco Settlement Agreement signed by the Minnesota Attorney General and Philip Morris USA in 1998.”
With this issue being so old and with the Tobacco Settlement Agreement in place, most shareholders have forgotten about these suits against tobacco companies. Still, this is just that much cash that the company can count on that it can pay out to its shareholders. Altria even noted that the Minnesota Supreme Court has now joined with 14 courts in 15 ‘lights’ cases which have rejected these claims on a variety of “legal and factual grounds.”
Altria shares are down $0.02 at $32.10 and it has a 5.1% dividend yield.
Philip Morris International, Inc. (NYSE: PM) is down $0.41 at $85.18 and its yield is only about 3.6%, which is low for tobacco companies. Its shares have been under pressure more than U.S. peers due to the currency fluctuations as the international markets have been so volatile.
JON C. OGG