Tobacco Products Have Some Pretty Fat Profit Margins

Ever wonder how cigarette companies can still be in business despite all those seemingly crippling excise taxes and legal settlements?

A chart from Morgan Stanley helps explain.

It shows which packaged consumer goods enjoy the highest operating margins — or the ratio of operating income to overall sales.

This is a function of how much you can sell a good for versus how much that good costs to produce including any fixed costs.

At the top of the food chain: moist, smokeless tobacco (aka dip or chew) at 61%, followed by cigarettes at 41%.

Check it out:

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