A few years ago I thought this game was over British-American tobacco (LSE: BATS) shares. The smoking is over. Over the course of my life, guests have gone from happily taking a puff in my parents’ living room, to standing on the doorstep to take a puff, to quitting smoking altogether.

But just look at FTSE100 today a giant. Its shares rose 44% in one year and 86% in two years. Despite this huge boost, the final yield is still 5.5% due to the continuous boost in dividends. Why is Big Tobacco in such indigent health?

None of my friends currently smoke, and as far as I know, neither do my children’s friends. Of course, many people still do this, especially in emerging markets. Someone is buying the $500 billion worth of “sticks” that British American Tobacco sells every year.

The FTSE 100 that survived

It has also combated decline by gaining a greater share of the shrinking overall market, supported by pricing power and leading brands such as Dunhill, Kent, Lucky Strike, Pall Mall and Rothmans. All these vape shops are probably doing good business, and British American Tobacco is also building brands here, especially Vuse and Velo.

Result? Like it or not, this is one of the most impressive dividend yielding stocks in the blue-chip index. I think that its shares are still worth considering today, although I suspect that after such a good streak, growth may sluggish down. The sector continues to be subject to all sorts of health and regulatory concerns, which is another risk to think about.

Writing all this made me think Diageo (LSE: DGE). FTSE 100 Spirits Maker is having a bleak time. Its shares have fallen 36% in the last year and 55% in three years. While this is largely due to the global cost of living crisis hitting demand for premium brands, as well as other threats such as tariffs, can we also expect a radical change in attitudes towards drinking?

Guests are still happily sipping drinks in my living room. I don’t make them stand on the doorstep yet. They are less drunk than before, but after that we manage a little. I’ve seen that younger people still like to hang around, but research suggests that one in four Gen Zers don’t touch a drop.

Those who want to stop drinking report that fresh appetite suppressants lend a hand. Can drinking replace smoking? As we all become more health conscious, there is definitely a chance. If so, could Diageo go the way of British American Tobacco? Maybe.

The idea came after I noticed that Diageo’s dividend yield had increased from a modest 2.1% in 2021 to 4.78% currently. This is getting closer and closer to the level of British American Tobacco. At the same time, the price-to-earnings ratio dropped from approximately 24.5 to 13.5. It is also approaching the level of British American Tobacco.

Does a substantial drink turn into a substantial tobacco? If so, then from an investment point of view, it’s not the worst fate in the world. British American Tobacco is one of the most profitable FTSE 100 companies of the millennium. I think Diageo stock is worth considering. Not so much for the potential for economic recovery, but for long-term earnings, with the odd boost here and there. Very similar to British American Tobacco. Anyway, it’s a theory.