Tobacco Stocks Provide Huge Returns

Tobacco Stocks Provide Huge ReturnsIt seems that tobacco companies have hit the stock market again. Considered as one of the safe havens, investment professionals have stated that the tobacco companies have measured the highest return out of all 67 industry groupings in the decade to 2011.

The facts were laid by the MSCI World Tobacco index. This measures the status of investment and returns of such companies. British American Tobacco (BAT) and Imperial Tobacco have benefited from the nervousness witnessed among the investors.

"Tobacco stocks have excellent income and yield characteristics and have proved very rewarding investments in the past", said portfolio manager of Fidelity's MoneyBuilder Dividend fund, Michael Clark. However, he also added that there is dilemma over the future growth of this market. According to him, shareholders definitely earn a good margin by way of disciplined dividend policy.

More than the hot smoke, tobacco industry has been barraged by economy questions as well. There are doubts over the long-term sustainability of an industry whose products are known to kill their customers. However, the ban on advertisement of tobacco after ten years has not provided fruits.

According to Darius McDermott of Chelsea Financial Services, tobacco stocks were pleasantly priced to zero a decade ago. This market has also seen a good amount of growth with the emerging investment. Much of the growth in this sector is witnessed in Asia.