It has been a lackluster year for the broader equity markets, but there have been multiple industries that have managed to move up the charts. The tobacco space in particular has scored outsized gains and has displayed few signs of letting up anytime soon. Simply put, tobacco stocks are on fire right now.

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Lighting Up
I think a major factor behind the tremendous run that tobacco stocks have had this year is that their selloff along with every other sector of the market in late 2008 to early 2009 was overdone and unwarranted. The stronger players in the industry have pushed into smokeless tobacco in recent years to add some diversification to their business models and then continue to hold the hammer of inelastic demand over its customer base.

Shares of Altria Group (NYSE:MO) have had a 17.8% run-up in price so far this year and still sport a 5.7% dividend yield. The company has been experiencing a downtick in its cigarette volume, but has been able to combat this trend with steeper pricing and gains made by its smokeless tobacco business. Altria's management recently announced a new $1 billion share buyback program after completing its previously $1 billion repurchase initiative. (For related reading, see Cigarettes Are Bad, Cigarette Stocks Aren't.)

Altria has not been the only domestic tobacco name that has been firing on all cylinders. Reynolds American (NYSE:RAI) and Lorillard (NYSE:LO) have also been relying upon stronger pricing to grind out year-over-year earnings growth through the end of the first three quarters of this year. Shares of Reynolds American and Lorillard have experienced 23.8% and 32.6% year-to-date advances respectively.

International Appeal
The international players in the tobacco market have also been seeing their stock prices rally. Philip Morris International (NYSE:PM) actually experienced an uptick in its cigarette volumes in its most recent quarter driven in part by big gains in Asia.

Philip Morris has ramped up its buybacks with $1.4 billion worth of repurchases taking place in Q3. It also upped its quarterly dividend payment by 20.3% at the end of the quarter. Shares of PM have risen 29.1% on the year.

London-based British American Tobacco (NYSE:BTI) is another international tobacco powerhouse that has also been having a big year. The company has addressed industry volume declines with market share gains, price markups and productivity savings. BTI shares have jumped 21.3% this year.

The Bottom Line
In an otherwise dreary year for global stock markets, the tobacco industry has prospered. A number of these names are trading at or near all time highs and business could not be any better. Traditionally tobacco companies have been relatively immune to tough economic conditions. This trend has continued for the better part of 2011 and is likely to persist on into 2012. (For related reading, see Tobacco's Big Yield.)

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At the time of writing, Billy Fisher did not own shares in any of the companies mentioned in this article.