It’s hard to imagine now, but at one time you could light up a cigarette just about anywhere: hotels, bars, restaurants, and even schools and doctors’ offices. One of the greatest achievements of public-health services in the U.S. has been the decline in the number of smokers as a result of educational campaigns, public-service announcements and outright smoking bans. Adult smokers made up nearly half the population in the mid 1960s, but only about 18% in 2012.

But it’s not over for tobacco companies yet: Although health authorities in the developed world have successfully helped millions kick their habit, smoking is on the rise in many emerging markets. A study conducted by the University of Washington on global smoking rates between 1980 and 2012 showed a 41% increase in the number of male smokers over that period; the number of female smokers was up 7%.

Overall, the number of cigarettes smoked around the world has grown to more than 6 trillion annually, as the numbers of smokers has shot up in countries such as China, Russia, Japan, the Philippines and many of the countries of the Middle East and Eastern Europe.

With an early understanding that there was a radical divergence in smoking rates in the U.S. and the rest of the world, in 2008 Altria (NYSE: MO) spun off Philip Morris International. The newly formed company had the exclusive right to make Altria’s iconic tobacco brands—such as Marlboro, Chesterfield and Parliament—outside the U.S. and now sells seven of the world’s top 15 brands in about 160 countries. Philip Morris (NYSE: PM) now ranks number one in market share in 59 countries and has more than 40% market share in 45 other countries.

Thanks largely to that indomitable market share, Philip Morris has the top operating margins in the industry, averaging in the mid-40% range. As a result, while revenue growth only averaged about 4% over the past five years, net income has grown nearly 4.5% over that period and earnings per share (EPS) growth has averaged 9.6%. Free cash flow per share has also shot up from $3.29 per share in 2008 to $5.51 last year.

That growth is clearly bad news for smokers and their health, but it’s nothing short of stellar for investors, as it has allowed the company to be generous with its shareholders. In the third quarter alone, the company raised its quarterly dividend by 6.4% to $1 per share, taking its total annual payout to $4.00 and its yield up to 4.8%. It has also had an $18 billion share-buyback plan in place since 2012, helping to bolster its per-share results.

Reduced Risk

The company understands that it is operating in a highly challenged industry, and it’s only a matter of time before international smokers become more attuned to the health risks they’re taking. As a result, the company has been developing “reduced risk” products, such as e-cigarettes and vaporizers, which provide nicotine without many of the other harmful byproducts, such as tar.

The company recently began testing Marlboro HeatSticks, which heats tobacco rather than burning it, and in June it acquired NicoCigs, a leading U.K.-based developer of vaporizers, to expand its product line. It has also licensed the reduced-risk products of its onetime parent, Altria Group, with the exclusive right to sell those products outside of the U.S.

According to CEO Andre Calantzopoulos, who spoke to Forbes about these products late last year, “These products can bring the biggest single benefit in a short period of time, in terms of public health.”

Philip Morris International seems to be making all the right moves to please analysts. Earnings forecasts are bit lumpy because of foreign currency impact. Though all of its business is international, it reports in U.S. dollars, shaving an estimated $0.72 off earnings per share in 2014 as the dollar has strengthened.

But the consensus view is that earnings should grow by an annual average of 6% over the next five years. The company trades at a reasonable valuation, just 16.6 times trailing one-year earnings. That’s in line with its historical average and actually lower than the tobacco industry as a whole, which is at 19.3 times trailing one-year earnings, and the S&P 500, at 18.6.

Philip Morris has turned in impressive growth since it became a stand-alone company in 2008. EPS growth has averaged nearly 10% as its dividend per share has grown by an average of 13% annually over the past five years. 

Despite that impressive growth, the company is still attractively valued, so you’re not overpaying for an outsized dividend yield, making it an impressive cash cow that should pay out a consistently growing dividend yield for years to come.