The trend of declining cigarette case volumes has been going on for years, or somewhere around two decades now. As of 2013, the Centers for Disease Control and Prevention (CDC) showed that only 18% of the population smoked. It was significantly higher a generation ago. Now the question that is coming up more and more is how the market of e-cigarettes is changing the landscape. Sure, the U.S. Food and Drug Administration (FDA) has proposed some regulation of non-traditional tobacco and nicotine products, but “vaping” is very profitable and it is growing, and this could be paramount for the big dividends that tobacco giants pay.

Go back to CDC figures from the past for trends and the dividend growth seems almost impossible. The CDC previously represented that adult smoking rates were 24.7% in 1997, 20.9% in 2005, 20.6% in 2009 and 18.0% in 2012. The paradox is that this steady decline in U.S. smokers has not kept the high dividends by Big Tobacco from going up each year.

And now a highly covered potential tobacco merger is supposed to be in the works. What this translates to would be a potential duopoly — and that might be great for dividend investors who do not mind that the companies they invest in are producing agents of death.

Altria Group Inc. (NYSE: MO) is within 1% of an all-time high around $41.50. Its unofficial target seems to be 85% for payout rates between dividends and buybacks. Its yield of 4.6% just exceeds Reynolds’. That is why Altria made our list of the highest-yielding dividends that are safe to hold. Altria has expanded into e-cigarettes, but it still lags.

Lorillard Inc. (NYSE: LO) is said to have a solid position in electronic cigarettes with the Blu e-cigarette. Now that Lorillard’s stock popped up so high, its dividend yield is down to 4%. Shares are close to $60, against a 52-week range of $41.56 to $63.56.

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Reynolds American Inc. (NYSE: RAI) has its Vuse brand e-cigarette, and its shares just hit an all-time high on Thursday of $60.28. This has driven the dividend yield down to an almost unheard of low of 4.45%.

24/7 Wall St. has opined before that the rise of the e-cigarette market actually may be a game changer for the world of high-dividend payments from tobacco companies. The perpetually declining case volumes of cigarette sales may have finally found a new avenue for nicotine addicts and nicotine lovers.

In the middle of May, Wells Fargo made a bullish call on Reynolds American while cautioning about the valuation of Altria. The dividend moves of late may have changed that, at least partially, as it used to be that Reynolds outyielded Altria. Reynolds was raised to Outperform by Wells Fargo at the time, while Altria was downgraded.

The big question is whether a merger comes to fruition for Lorillard and Reynolds. It may involve British American Tobacco. This has been hard enough to follow as a “yes and no” situation, so until something is more firm we just cannot really include the pre-merger or post-merger numbers.

Now let’s compare this to a year ago, looking at the dividend yields and share prices. They have changed handily in the bull market and low interest rate environment that helps defensive stocks with high dividends. We have also included the current consensus price targets from Thomson Reuters to see if there is still any implied upside.

Altria’s yield a year ago was 4.9%, versus just over 4.6% now. Altria shares traded at about $36.15 a year ago, versus $41.45 now. The company is worth $83 billion in market cap, and the consensus analyst target is $40.00. Will analysts upgrade their targets, or will the stock just remain above what analysts think it is worth?

Reynolds American’s dividend yield was 5.2% right around this same time in 2013. Its stock traded around $49.10 a year ago, versus more than $60 now. Analysts have a price target that is just under $55 here, and the market cap is $32 billion.

Lorillard’s dividend was close to 5.0% this time last year, but it is closer to 4% now. Lorillard shares were trading around $45 this time last year, versus almost $60 now. Lorillard has a market cap of $21.5 billion, and the consensus price target is also just under $55.

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How low can cigarette dividends go? It does seem odd that all three of the tobacco giants are trading above what analysts think they are worth. That is not normal, even in a bull market, or even in a stock picker’s market.

Before you panic about valuation or low yields, there are several things that Big Tobacco has going for it. First is that betting the under or against tobacco companies has been the wrong bet decade after decade. Second, tobacco companies are so good at managing earnings against declining sales volumes that newspaper executives should hire them as consultants. Third is that investors keep flocking to tobacco stocks as defensive stocks that pay high dividends, and that should hold up if the stock market was to sell off suddenly and sharply.

Lastly, if the tobacco companies can keep vaping trends going, they may make a bloody fortune above and beyond what analysts expect.

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