What an ugly end of the trading week on Friday down an ugly 261.41 points on the DJIA. Maybe capitulation could be around the corner next week as retail traders throw in the towel in disgust. Well if your like me and need to make money in bad and good markets, it may be time to look at the tobacco stocks. With unemployment still rolling along at 9.5 to 17% depending on if you count the fall offs, Tobacco and liquor stocks should be performing just find and pay you a dividend to boot.
The first stock in the group I would look at is Reynolds American Inc (symbol RAI, $55.17). This stock has a dividend of 6.53% and earnings that are growing at 6% a year. The 12 month total return on the stock is 35%. The industry revenues are going flat to down a little but it is still a very profitable business.
The next stock I would take a look at is Philip Morris International Inc.(Symbol PM , $49.67). This company pays a 4.67% dividend yield. This company operates at 25.30% net profit margins and is growing at 10% a year. People are going to smoke and drink and swear, just like they always have.
Of course we can never forget about Wall street's forever darling Altria Group Inc. (Symbol MO, $21,26). "MO" has a 6.59% dividend yield and a one year and 3 year Total return of 29%. I will take that number in this trading environment, no problem! With $2.00 a share earnings in 2011 the stock is just flat-out cheap here. So buy and hold these stocks till unemployment gets down to 4% and enjoy the dividend.
Please comment. I will answer questions on any stock subject. Just throw it out there for the readers. All ideas are accepted here.
Freewilly
I have owned Big MO for years, its a great stock! How about that adult beverage stock that you teased us with? Diageo?
ReplyDeleteGreetings. Diageo (DEO) works for me. I had blogged back in March about Boston Beer Company (SAM), which has had a good run here.
ReplyDeleteThank you for commenting.
Freewilly