Before you hit the panic button, I will tell you that as an independent grocer sales of cancerettes have NOT gone down. True, people complain about the price and some are trading down to generics.
My number one brand is Newport which is not an MO brand but they are going between $4.00 and $4.50 per pack! When I promote them they sell well as cartons.
During economic down turns people tend to smoke and drink more and maybe beat their wives a little more. Smokers are addicted to the product and will continue to buy. Taxing these products anymore however will create a black market in states where the tax is highest. Bootlegging cigarettes is a profit center for organized crime in Canada.
A concern is that the FDA can regulate flavoured cigarettes; this could put a real damper on cancerettes aimed at young females who pick up this filthy habit to maintain their figures.
Anyway, I am long MO and am going to continue to buy more after the dividend is paid as I note a general decline in price after this occurs.
The cash flow and earnings seem to indicate that the dividend can be maintained and a 7% yield is pretty good. I got taken on GE when they claimed they could maintain the divie and then it got cut....