Ironically, despite a recent string of bad news, tobacco companies have found a number of ways to please shareholders since the beginning of the year. Management hasn't left the stock market to do all the talking, either. Tobacco's top brass have been busy rewarding shareholders with plenty of the industry's abundant cash flow in the form of dividends. The perks don't stop there. And that has allowed them to create shareholder value in these tough times via buybacks and dividend hikes.
Tobacco is still no place for a quick trading profit, however.
There's no getting around the fact that a troupe of grim barristers continue to hound the industry. As of Mar. 31, for instance, RJR was dogged by some 536 cases pending. And no matter how sweet a deal the cigarette makers now offer shareholders, the legal headaches aren't likely to go away soon. Besides the headline case in Florida, cigarette makers are beset by another high-profile court battle with the Justice Dept. In addition, dozens of other suits linger in dockets throughout the nation.