Tobacco makers have been forced to adjust over the years as
the cigarette industry has come under fire.
But one thing hasn't changed -- stable cash flows allow them
to keep paying hefty dividends to shareholders. Even if fewer
people light up in the U.S., many do overseas.
Among the big tobacco companies,Vector Group (
) on March 10 lifted its quarterly payout by two cents to 40
cents a share for a 7.5% annualized yield. The Miami-based
company, whose brands include Grand Prix, Liggett Select and
Pyramid, also invests in real estate. Last year it paid $60
million to boost its stake in Douglas Elliman Realty to 71% from
50%. Vector owns Elliman through its New Valley unit, which also
holds interests in apartments, condos, hotels and office
The stock is testing its 10-week moving average for the first
time since a January breakout past a 16.83 flat-base buy
On Feb. 7,Reynolds American (
) raised its quarterly dividend to 67 cents a share, a four-cent
increase. It works out to $2.68 on an annual basis for a 4.8%
yield. Rumors that the Camel and Pall Mall maker is interested in
) have returned.
Like its rivals, Reynolds has entered the electronic cigarette
market, with its VUSE Digital Vapor Cigarette. The company says
the product is performing well in Colorado and Utah. Shares are
just shy of a 56.87 entry.
Altria Group (
) in December set a quarterly payout of 48 cents a share, or
$1.92 annually, also yielding 4.8%. The Marlboro maker was in the
news last week after an Illinois appeals court reinstated a $10.1
billion verdict against its Philip Morris USA unit for misleading
consumers about "light" cigarette risks.
Last month, Altria acquired Green Smoke's e-vapor business.
The stock is within 5% of a 38.68 buy point. Lorillard (4.2%
yield), whose blu eCig market share is growing in the U.S., is
also within 5% of a 56.95 cup-base buy point.British American
) (4% dividend yield) is just below a 115.92 entry.