Tobacco and cigarette equities are frequently touted as recession-resistant industries. Due to the addictive nature of the vice, smokers are often reluctant to cut tobacco from their budgets, even though the cost of cigarettes, especially after taxes, has continued escalate. Moreover, cigarettes and other tobacco product sales often increase when consumers are forced to cut food budgets, work longer hours and deal with stressful situations.
Despite the known realities of the negative health consequences associated with tobacco, nicotine is also known to calm the nerves during aggravating situations, curb one's hunger and act as a stimulant. Further, the metaphorical dark cloud surrounding tobacco will keep many individuals and even some institutions and funds from investing in tobacco equities. This disinterest by some investors might contribute to market undervaluation of tobacco related equities, as there could often be fewer buyers of cigarette manufacturers than there might be for many other consumer goods makers.
Below are the present yields and recent equity performance rates for six publicly traded tobacco companies: British American Tobacco (BTI), Lorillard (LO), Altria Group (MO), Philip Morris International (PM), Reynolds American (RAI) and Vector Group (VGR). I have provided their 1-week, 1-month, 2012-to-date and 6-month equity performance rates.
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