Recent Performance Review Of 6 High Yield Tobacco Equities

Cigarette and tobacco equities are often hyped as recession-resistant businesses. The addictive nature of the vice makes many smokers reluctant to cut tobacco from their budgets, or even substitute their preferred brand, though the cost of cigarettes has continued escalate at a rate that outpaces almost any other consumer good. In fact, it is frequently the case that cigarette sales, as well as other tobacco products, often increase when consumers are forced to cut food budgets, work longer hours and deal with stressful situations.

Additionally, beyond the known realities of the negative health consequences associated with tobacco, nicotine is believed to calm the nerves during aggravating situations, curb one's hunger and act as a stimulant. As an investment option, the health issues and litigation consequences that have plagued the industry have also kept many individuals, institutions and funds from investing in tobacco equities, either as an official or unofficial policy.

This could contribute to market undervaluation of tobacco related equities, as there will often be less demand for tobacco equities 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, 3-month and 2012-to-date equity performance rates.