Six Tobacco Stocks Near 52-Week Highs

Investors looking for a defensive play, and who don't have an issue with so-called sin stocks, might be considering tobacco stocks about now. By and large, tobacco stocks continue to perform strongly, despite years of lawsuits, taxation and general disdain from the public. And some of them have the highest dividend yields in the S&P 500. It is no wonder Bank of America BAC just raised its price targets on tobacco stocks. They continue to offer safety and yield. Here is a glance at six tobacco stocks that have been trading near recent 52-week highs. Altria MO: Its brands include Marlboro, the world's best-selling cigarette brand since 1972. Like Philip Morris and Reynolds American, Altria has made some moves into smokeless nicotine delivery systems. It also increased its dividend twice in 2010; the yield is now 5.3%. The stock has risen about 13% since the beginning of the year, which is less than the industry average. The 52-week high is $28.13. British American Tobacco BTI: This London-based company recently inked a deal to acquire Colombia's second-largest tobacco player, Productora Tabacalera de Colombia, for $452 million after a bid from Philip Morris was rejected. British American Tobacco also has been buying back its own shares lately on the London exchange. The share price has risen more than 50% over the past year. The recent multi-year high is $90.60. Imperial Tobacco (ITYBY): The largest cigarette maker in the United Kingdom was something of an M&A machine before the recession but now says it has no major deals in the pipeline. The company has announced a share buyback program, though. And Goldman Sachs GS has mentioned Imperial as a potential takeover target. The stock is more than 30% higher than a year ago, outperforming the broader markets in that time. The 52-week high is $73.54. Lorillard LO: The oldest continuously operating tobacco firm in the United States is also the nation's number three cigarette maker. Lorillard has a 3.9% dividend yield, and the board recently approved additional share buybacks. Net cash flow from operations has grown in recent reporting periods. The share price has jumped more than 40% just since March, outpacing rivals Altria, Reynolds American and the industry average. Note though that shares have pulled back more than 4% from the recent multi-year high of $116.90. Philip Morris International PM: The largest cigarette company in the world recently bought the rights to an aerosol nicotine delivery system developed by Duke University. The New York-based company has raised dividends every year since it was spun off from Altria in 2008; the yield is currently 3.5%. The share price has risen more than 20% since the beginning of the year. $71.75 is the stock's high since the spin-off from Altria. Reynolds American RAI: The second largest cigarette maker in the United States beat earnings expectations in the most recent quarter due to strong demand for its Camel and Pall Mall brands. Reynolds boosted its dividend by 8.2% in February and now has yield of 4.9%. The return on equity is 17.1%. Shares are trading more than 20% higher than at the beginning of the year. The recent multi-year high is $39.87. Not all tobacco stocks are drifting endlessly higher, though. Shares of tobacco processor and distributor Universal Corp. UVV are about halfway between their 52-week high and low, as well as trading in the same neighborhood as three months ago. Smokeless tobacco product maker Star Scientific CIGX saw its stock plunge from its 52-week high in yesterday's market downturn. And discount cigarette maker Vector Group VGR is trading about 20% higher since bottoming in January but the share price is still about a buck shy of the 52-week high. And finally, the following three exchange traded funds include some stake in tobacco stocks, as well as other consumer goods oriented ones: • Consumer Staples Select Sector SPDR Fund XLP is up about 8% year to date
• iShares Dow Jones US Consumer Goods Sector Index Fund IYK is up about 8% year to date
• Vanguard Consumer Staples Index Fund VDC is up about 10% year to date