Tobacco stocks aren’t exactly growth investments, since cigarettes are highly regulated and clearly unhealthy for you. However, there’s a reliable revenue stream there as a small group of consumers keep chain-smoking tobacco stocks to decent profits.
A top dividend payer in this space is Philip Morris (PM), which is flat over the last 12 months, but boasts a smoking 5.5% yield.
Growth is admittedly not on the way, but investors looking simply to take shelter from the chaos in Congress can have confidence that Altria isn’t going anywhere thanks to the high barriers to entry in the tobacco biz and the big-time brands it owns, led by the world’s No. 1 seller, Marlboro.
Revenue is stable, and dividends are rich and sustainable at Philip Morris at a payout ratio of about 63% — even after a nearly 11% increase to dividends in September.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP.