Reynolds American and Lorillard Strike a Big Tobacco Deal

The No. 2 and 3 U.S. cigarette companies, Reynolds American  (NYSE: RAI  ) and Lorillard (NYSE: LO  ) , announced a $27.4 billion merger on July 15. While the new business, which will keep the Reynolds American name, will still trail tobacco giant Altria (NYSE: MO  ) by a wide margin in terms of market share, the company should remain very profitable.

Smoking is bad for people, but is it good for business?

In this segment of The Motley Fool's Where the Money Is, consumer-goods editor Mark Reeth and analyst Sean O'Reilly discuss whether the merger will bless investors with large dividends and strong stock gains, and if it was smart for the company to drop blu eCigs during the deal.

Tobacco companies aren't the only smart dividend picks
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.


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