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The Vector Group: Is The Cigarette Industry Burning Out?  

Conclusion

The tobacco industry is obviously in decline, but that still has not stopped tobacco stocks from outperforming the market. There is a lot to like about the Vector Group besides the 8.7% yield. It uses its capital wisely, has a high earnings yield, is owned by Carl Icahn and David Dreman, and 24.5% of its ownership is by insiders. Also, its performance will not suffer in an economic slowdown due to the nature of its product.

One issue with the company that I have encountered is the lawsuits that are currently pending against them, but this is the nature of the business. All of the other cigarette producers are experiencing the same issue. I will be looking to add this to my portfolio once the stock pulls back to the $15-$17 a share range.

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