New Global Tobacco Index: Solid Dividend Yield and Good Returns

The accompanying table presents the top five companies by market cap and statistics for the ETF Innovators (ETFI) Global Tobacco Index, with the Top 20 rated companies posted a small gain of 0.6% over the past year thanks to an average dividend yield of 5.7%. The Global Tobacco Index outpaced all of its benchmark ETFs on a total return basis, including Consumer Staples (XLP), Claymore/Sabrient Defensive Equity Index (DEF), Vanguard Consumer Staples (VDC), and iShares Dow Jones Select Dividend (DVY).

Since the split and spin-offs of Altria Group (MO) and Philip Morris International (PM) in mid-April, both companies have lost nearly one-fourth of their market value. Altria Group appears to be the best opportunity right now for investors of the entire Global Tobacco Index with a dividend yield of nearly 8% (increased by 10% last quarter to 32 cents per share every three months), a strong U.S. dollar, and its pending acquisition of UST Inc. (UST) to dominate the smokeless tobacco market with leading brands such as Skoal and Copenhagen.

Comments

[searcher:]

These are only relevant as yield plays with diminishing long term revenue. Even 'emerging' and presumably uninformed or unmotivated markets will shun these products much more quickly than many suppose. The revenue expected is not that secure even from those markets over even the medium term (7-10) years.

2008 Nov 19 11:50 AM