Altria Group (NYSE: MO - News) is the leading domestic tobacco company, which generates significant cash flow and the stock has a high dividend yield. In an effort to expand into adjacent categories, Altria acquired UST, the world's leading moist smokeless tobacco manufacturer.
However, the company is engaged in numerous tobacco liability suits. Several large punitive damage awards have been upheld, most recently the $79.5 million judgment in the Williams case in 2009.
In addition, the 150+% federal excise tax increase should dramatically reduce cigarette volume. A Sell rating is recommended.
With the FDA now regulating cigarette content a lot of these lawsuits will be null and void. MO can tell the plaintiff go complain to the FDA. With the FDA regulating cigarette content that is the best legal shield MO can have.