dow2664
Opening View: DJIA Futures Rise Ahead of Retail Sales Schaeffers Research – 25 minutes ago by Joseph Hargett (jhargett@sir-inc.com) 11/15/2010 7:34 AM Plagued by fears of Chinese interest rate hikes and European sovereign debt, the Dow Jones Industrial Average (DJIA) sold off sharply …
Opening View: DJIA Futures Rise Ahead of Retail Sales
dow2664
On Friday, November 12, 2010, the Department of Health and Human Services announced in the Federal Register Volume 75, Number 218 the proposed rule called ‘Required Warnings for Cigarette Packages and Advertisements.’ As part of the proposal, the Federal government came out with a series of graphic, colorful picture warnings that would appear on the upper half of the top of the pack. Many of these warnings are very disturbing, featuring such pictures as dead bodies, a man blowing cigarette smoke out of the hole in his throat, a mouth with lip cancer, etc. If you want to see a slide show of about a dozen of the proposed warnings, click HERE . Although the implementation isn’t for a couple years out, it is bound to have some effect on future US sales. Some tobacco companies offer incredibly high yields. Part of the reason for this is due to the stock trading at what I call the ‘bad stock discount.’ This discount comes about because many individual and institutional investors avoid the so-called sin stocks, also known as vice stocks. These companies can include such industries as gambling, alcohol, and adult businesses. But tobacco and cigarettes seem to be on top of the vice list. With fewer potential buyers of the stocks, the stocks trade lower that what other stocks would with similar financials and similar dividend payouts but non-vice businesses. The lower stock price causes the payout to reflect a higher yield. In addition, tobacco companies need to pay a higher payout in order to attract investors who would initially not look for a cigarette company stock. Of the ten companies involved in tobacco in some way, eight of them pay dividends ranging from 2.7% to 8.4%. One of those stocks is Lorillard, Inc. (LO), a cigarette manufacturer with 41 brands including Newport, Kent, True, Maverick, and Old Gold. The company has been around since 1760; that’s 250 years. The stock pays a yield of 5.1% and trades at 12 times forward earnings. The company’s primary market is the United States, so it may be more affected by the upcoming warnings. Philip Morris International, Inc. (PM) sports a forward price to earnings ratio of 14 and a yield of 4.3%. The company’s brands include Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Next, and Philip Morris. The new US cigarette warnings shouldn’t have any effect on the stock as its market is outside the US, including Canada, European Union, Russia and Eastern Europe, the Middle East, Africa, Asia and the South Pacific, and Latin America. Universal Corp. (UVV) is a company that is not often mentioned in the financial press. The company, based in Richmond, Virginia, is a leaf tobacco merchant and processor which operates worldwide. The stock has a PE ratio of 8 and a yield of 4.3%. Its tobacco is used primarily for cigarettes, but also for cigars and smokeless tobacco products. You can access a free Excel list of all the high yield tobacco stocks , which can be downloaded, sorted, and updated, at WallStreetNewsNetwork.com. Disclosure: Author didn’t own any of the above stocks at the time the article was written. By Stockerblog.com
Graphic Color Anti Smoking Pictures to Appear on Cigarette Packs: Future of Tobacco Stocks
| ||
| TODAY'S STOCK MARKET DOW JONES INDUSTRIAL AVERAGE DJI, S&P 500, NASDAQ INDEX ... Learning and Finance The Dow Jones Industrial Average fell 2.2% as did the S&P 500. The Nasdaq Composite fell off 2.4% last week as well. Last week, investors worries about debt ... See all stories on this topic » | ||
| Anadarko Discovery Boosts Prospects Of New W Africa Oil Basin Wall Street Journal By James Herron Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Anadarko Corp.'s (APC) second oil discovery offshore Sierra Leone further demonstrates that a new ... See all stories on this topic » | ||
| Ericsson To Deploy 3G Network For India's Aircel Wall Street Journal STOCKHOLM (Dow Jones)--Ericsson Monday said it has received a contract to roll out a 3G/HSPA network across six of India's leading mobile operator Aircel's ... See all stories on this topic » | ||
| Serco FY On Track After 'Strong' Second Half Wall Street Journal By Simon Zekaria LONDON (Dow Jones)-- Serco Group PLC (SRP.LN) Monday said it's on track to meet its full-year and long-term profit expectations after the ... See all stories on this topic » | ||
| China sets curbs on foreign real estate purchases MarketWatch ... according to a Dow Jones Newswires report, which cited a joint statement between the State Administration of Foreign Exchange and the Ministry of ... See all stories on this topic » | ||
| TPG, Newbridge, General Atlantic Raising Up To $200 Mln In Lenovo Share Sale ... Wall Street Journal By Nisha Gopalan and Owen Fletcher BEIJING (Dow Jones)--Private equity firms TPG Inc., Newbridge Capital and General Atlantic LLC are raising up to US$200 ... See all stories on this topic » |
| ||
| ||
| GLOBAL MARKETS: European Stocks Reverse Losses On Trade Data Wall Street Journal By Toby Anderson & Andrea Tryphonides Of DOW JONES NEWSWIRES LONDON (Dow Jones)--European stocks reversed early losses Monday as investors digested data ... See all stories on this topic » | ||
| Tokyo Shares End Higher As Strong GDP, Weak Yen Help Market Wall Street Journal By Bradford Frischkorn Of DOW JONES NEWSWIRES TOKYO (Dow Jones)--Tokyo stocks rose Monday, helped by better-than-expected gross domestic product data and a ... See all stories on this topic » | ||
| Bahrain Bourse To List Ithmaar As Commercial Bank From Dec 1 Zawya BEIRUT (Zawya Dow Jones)--The Bahrain Stock ExchangeBahrain Stock Exchange said Monday the shares of Bahrain's Ithmaar BankIthmaar Bank will be delisted ... See all stories on this topic » | ||
| India Shares End Higher; Bank Stocks Lead Gains Wall Street Journal MUMBAI (Dow Jones)--Indian shares ended higher Monday, wiping off earlier losses, led by gains in banking stocks after October inflation numbers sprung no ... See all stories on this topic » | ||
| China Energy Firms Flock to Hong Kong Wall Street Journal 29 before listing on the Hong Kong stock exchange Dec. 17, according to a term sheet seen by Dow Jones Newswires on Monday. It is selling a 25% stake to ... See all stories on this topic » |
| ||
| Goldrea Resources Corp.: New Zone Encountered at Level Three From Golden Rose ... MarketWatch (press release) The TSX-Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Contacts: Goldrea Resources Corp. ... See all stories on this topic » |
