The stability and generous yields of Big Tobacco stocks MO, PM and RAI should serve investors well in this tumultuous period in the markets. More
Tobacco stocks are some of the most popular sin stocks. Tobacco companies like Philip Morris (PM) and Lorillard (LO) are deemed defensive consumer staples in that they won’t be going anywhere any time soon.
However, legal action against tobacco companies regarding marketing has contributed to its slow decline since the 1980s. The U.S. Food and Drug Administration continuously threatens to bans menthol cigarettes, and tobacco stocks always falter as shareholders panic. Even though the FDA has not yet followed through on its efforts to squash menthol cigarettes, it is forcing tobacco companies to packaging their products without their logos branded on the cartons.
Still, tobacco continues to grow on the international stage, and overall sales, volume and dividends of tobacco stocks will likely continue on longer than any antagonistic legislation wants. So, investors can hold onto tobacco stocks for the high distributions but will want to be wary of when the FDA will really irreparably damage Big Tobacco.
The merger between Reynolds and Lorillard is huge for Big Tobacco, but there are more reasons to be bullish on RAI stock. More
Tobacco stocks are no stranger to debt. But Altria at least knows how to use its debt responsibly. Philip Morris ... not so much. More
Tobacco stocks Reynolds American (RAI) and Lorillard (LO) reportedly are closer to being joined at the hip, but there's not much in it to be excited about. More
The attorneys general of 28 states have written to Walmart and four other retailers asking them to end tobacco sales in their stores. More
LO stock and RAI stock are up big today on M&A rumors, but the sheer size of these tobacco stocks (among other issues) makes this an unlikely marriage. More