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New Global Tobacco Index: Big Dividends, Solid Returns
By: Mike Havrilla   Tuesday, November 18, 2008 10:26 AM
Sectors: Consumer Staples
Symbols: LBIX, MO, SPLS, UST
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The accompanying table presents the top five companies by market cap and statistics for the ETF Innovators (ETFI) Global Tobacco Index, with the Top 20 rated companies posted a small gain of 0.6% over the past year thanks to an average dividend yield of 5.7%. The Global Tobacco Index outpaced all of its benchmark ETFs on a total return basis, including Consumer Staples (XLP), Claymore/Sabrient Defensive Equity Index (DEF), Vanguard Consumer Staples (VDC), and iShares Dow Jones Select Dividend (DVY).

Since the split and spin-offs of Altria Group (MO) and Philip Morris International (PM) in mid-April, both companies have lost nearly one-fourth of their market value. Altria Group appears to be the best opportunity right now for investors of the entire Global Tobacco Index with a dividend yield of nearly 8% (increased by 10% last quarter to 32 cents per share every three months), a strong U.S. Dollar, and its pending acquisition of UST Inc. (UST) to dominate the smokeless tobacco market with leading brands such as Skoal and Copenhagen.




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