Six Smoking Stocks

Now that Barrack Obama is the president-elect, the United States will have the first smoking president in many years. Although he has made plans to quit smoking, he admits that he still hasn't yet stopped entirely. Will this have an effect on the consumption of cigarettes and tobacco? If you think so, and you have no objection to investing in cigarette stocks, you may want to consider the tobacco companies, especially because of their extremely high yields.

• Vector Group Ltd. (VGR) is a Florida based company that has numerous brands of cigarettes including Liggett, Grand Prix, Eve, Pyramid, USA and nicotine-free Quest. The stock has a P/E of 15 a PEG of 1.25, and pays a yield of 11.7%.
• Reynolds American Inc. (RAI) makes and markets cigarettes and other tobacco products including the Camel, Kool, Pall Mall, Doral, Winston, Salem, Misty, Capri, Dunhill, State Express 555, and Natural American Spirit brands. The stock has a P/E of 9 a PEG of 1.33, and pays a yield of 8.4%.
• Altria Group Inc. (MO) is a Virginia based company that makes and markets cigarettes, cigars, and beer. It is the largest cigarette company by market cap in the US. The stock has a P/E of 5 a PEG of 0.86, and pays a yield of 8.5%.
• British American Tobacco plc (BTI) is a London based company that markets cigarettes and cigars under the Dunhill, Kent, Kool, Lucky Strike, Pall Mall, Rothmans, Vogue, Viceroy, and Peter Stuyvesant brands. It is one of the largest cigarette companies in the world by market cap. The stock has a P/E of 14 a PEG of 1.17, and pays a yield of 3.5%.
• Philip Morris International, Inc. (PM) markets Marlboro, L&M, Philip Morris, Chesterfield, Parliament, Lark, and Virginia Slims outside the United States. The stock has a P/E of 12 a PEG of 1.1, and pays a yield of 5.1%.
• Lorillard, Inc. (LO) has the Newport, Kent, True, Maverick, Old Gold, and Max brands. It has a P/E of 12, a PEG of 1.44, and a yield of 6.3%.

If you like high yield stocks, you should check out electric utilities and gas utilities. You can also download an Excel database of monthly dividend stocks and utility stocks at WallStreetNewsNetwork.com.

Comments

[BlueOkie:]

Growth will need to come from outside the US. The biggest risks with tobacco are lawsuits and higher taxes. With declining revenues at all levels of gov't, tobacco is a big target.

Utilities do well when interest rates begin to fall. Higher fuel costs hurt because they are carriers and demand goes down. Bad storms that destroy infrastructure can also destroy profits.

2008 Dec 14 09:14 AM

[fireball:]

stocker
does winston fall under rai? do you like reynolds or altria the best?
i am guessing phillip morris may be the best pick of the choices listed?

2008 Dec 14 10:36 AM

[CLH:]

I dont like Obama but I like the look of the stocks. I see little or no lawsuits. Anyone who still doesnt know smoking is bad for them will have no sympathy.

2008 Dec 14 02:24 PM

[livesinhiscar:]

Fresh lawauits coming......just approved today....there is just a culture of lawsuits that seems to never go away from these stocks.....

>>> tobacco shares are down after the U.S. Supreme Court voted 5-4, saying a federal labeling law doesn’t shield cigarette makers from suits accusing them of deceiving consumers by describing cigarettes as “light” or “low tar”.

2008 Dec 15 02:17 PM

[BlueOkie:]

With Congress comprised of so many lawyers, do you think Tort Reform will ever work to the benefit of the parties?

2008 Dec 21 11:30 AM

[matviy:]

Electronic Cigarettes

Jun 18 05:40 PM