TOBACCOVILLE, N.C.—It’s a great time to be a cigarette company again.

Far fewer Americans are smoking, and yet U.S. tobacco revenue is soaring, thanks to years of steady price hikes. Americans spent more at retail stores on cigarettes in 2016 than they did on soda and beer combined, according to independent market-research firm Euromonitor International. Consolidation and cost cutting are boosting profit. Big Tobacco shares are on a roll.

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