Lorillard Inc. (LO), Altria Group Inc (MO), Reynolds American, Inc. (RAI): Three High Dividend Paying Stocks Worth Watching

Its top two brands, Camel and Pall Mall, are increasing market share, which is a good sign for the company in the midst of slowing volumes. Its Camel brand’s market share is now 8.5%, up 0.1% year over year because its menthol version is gaining traction. Its Pall Mall brand has 9% market share, up 0.5% year over year due to better performance from the newly launched Pall Mall White and Pall Mall Black blends.

In the small but fast-growing e-cigarette market, sales of its Vuse brand will be expanded across many geographic locations this year. This provides a significant opportunity for the company, as it will have the advantage of launching its product in this category sooner than its largest competitor, Altria Group Inc (NYSE:MO).

I don’t think Reynolds American, Inc. (NYSE:RAI) will have any issue in providing dividends to investors in the long run, looking at share gain by top brands and opportunities in the e-cig market. I would recommend buying this stock for dividend seeking investors.

Harsh times, high profit

All these companies experienced declining cigarette volumes in the first quarter, but improved pricing should help these companies generate good profitability in future. Lorillard Inc. (NYSE:LO)’s should see an upside due to its growing Blu e-cig and its buyback program. Altria Group Inc (NYSE:MO)’s should experience an upside as well from its new MLP program, which will improve its profitability.

Reynolds American, Inc. (NYSE:RAI) has faced the largest decline in volume, but its top brands, Camel and Pall Mall, which contribute to more than 50% of sales, are gaining market share. Its Vuse brand is also expected to gain traction once the company starts a complete rollout in the U.S.

There is no obvious issue which would cause the companies to reduce their dividend yield, so, for dividend-seeking investors, all three of these stocks are worth a watch.

The article 3 High Dividend Paying Stocks Worth Watching originally appeared on Fool.com and is written by Madhu Dube.

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