Altria Group Inc (MO), Reynolds American, Inc. (RAI), Lorillard Inc. (LO): The Best Domestic Tobacco Stock To Buy Now

Altria was late to the game with its MarkTen e-cig, but came out swinging, announcing that, “Our product design and engineering folks have made a number of proprietary improvements to the existing electronic cigarette model, and we think our product is superior.”

Altria already dominates the traditional cigarette and smokeless tobacco markets, so there is no reason why it can’t surpass Reynolds and take away share from Lorillard down the road. Especially since the electronic cigarette is in its infancy stages and the market is far from developed. 

The bottom line

Altria is the best domestic tobacco play and is cheaper than its closest competitor, Reynolds American. Lorillard may be cheapest, but it carries lots of menthol-related risk and its dividend yields less than both of its competitors. Altria dominates the traditional and smokeless tobacco industry, and will likely dominate the e-cig market– or at least be a major player in it going forward. After the recent dividend increase, the company’s 5.5% dividend yield makes it an extremely attractive buy.

The article The Best Domestic Tobacco Stock To Buy Now originally appeared on Fool.com and is written by Joseph Harry.

Joseph Harry owns shares of Altria Group. The Motley Fool has no position in any of the stocks mentioned. 

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