Tobacco products are among the most regulated industry segments in the world, yet its major players have long generated strong cash flow and very attractive dividends. Companies with dividend yields above 5% offer investors not only an attractive return on capital but also resilience to market fluctuations, which the market has increasingly appreciated in recent years due to the current uncertain environment. Who are the main players in this segment, how are they performing and why are they doing better than ever despite the decline in sales of conventional cigarettes over the last decade?

The tobacco industry has long been one of the most controversial but stable segments of the global economy. It is an industry that faces continuous regulatory pressure, declining smoking rates in developed countries, high taxation and legal challenges. Yet tobacco companies have been among the most reliable cash generators on the stock markets for decades. Their business model is based on extremely…