Tobacco Stocks: Smoke ‘Em If You Got ‘Em :PM, MO, NSRGY, VGR

Plenty of judgment can be passed on the habit of tobacco consumption and the reality is the habit has been proven to be toxic to one's health. Fortunately, one does not have to smoke to reap the rewards of tobacco stocks. Tobacco stocks are really the epitome of "sin stocks," though the infamy their products have gained for being so unhealthy is arguably unfair compared to the likes of McDonald's (NYSE: MCD) and Coca-Cola (NYSE: KO). Both of those companies hawk products that can lead to myriad serious health problems and both firms and their nearest rivals have certainly contributed to a serious obesity epidemic in the U.S. that costs the country billions of dollars in lost productivity every year. Still, tobacco stocks are seen as far more evil than hamburger or soda companies.

Well, tobacco stocks aren't evil for investors and an investor doesn't need to engage in the habit to profit from it. Think about tobacco stocks this way: Let someone else enjoy the habit while you enjoy your dividends and capital appreciation.

Philip Morris International (NYSE: PM):

Philip Morris International is the international version of the former Philip Morris. Altria (NYSE: MO) is the firm that's more focused on domestic tobacco markets. The returns offered by both stocks in 2012 are almost identical, but long-term investors, of which the tobacco sector attracts many, might want to consider PM over MO.

The reason for that is simple and it involves one key fundamental. PM's international exposure will be an important driver of growth in the coming years. Smoking is vilified here in the U.S., but in other countries, particularly fast-growing emerging markets, smoking is seen as a glamorous status symbol. (more)