Tobacco Dividends Plentiful and Reliable

By Michael Hooper | More Articles | Save For Later 
October 23, 2013 | Comments (0)

Investors looking for yields may want to consider owning tobacco stocks. Dividend yields for tobacco stocks are more than double the yield of the S&P 500 index. Tobacco companies have been some of the most reliable dividend payers in American corporate history, despite health care initiatives against tobacco. I believe adults have the right to smoke tobacco as long as they know the health risks. Tobacco stocks with dividend payout ratios below 100% of their earnings can be lucrative additions to a dividend portfolio.

If you are going to own tobacco, you might as well own successful companies that have survived and thrived despite government oversight, high taxes and public health care initiatives to stop smoking.

Dividend yields for Altria Group (NYSE: MO  ) , Lorillard Tobacco Group (NYSE: LO  )Reynolds American (NYSE: RAI  ) and Vector Group (NYSE: VGR  ) range from from 4.58% to 9.30% -- substantially more than the S&P 500's yield of 2%.

http://www.fool.com/investing/general/2013/10/23/tobacco-dividends-plentiful-and-secure.aspx?source=iaasitlnk0000003