Top Tobacco Stocks for Q2 2022

IMBBY, RLX, and BTI are top for value, growth, and momentum, respectively

The tobacco industry includes companies that grow, produce, and sell tobacco and related products such as cigarettes and e-cigarettes. Sometimes called sin stocks, tobacco companies are avoided by some investors, including ones who focus on socially responsible investing. The biggest tobacco companies include Philip Morris International Inc. and Altria Group Inc., both of which sell products with dominant brand names.

The tobacco and nicotine market has a growing base of more than 1 billion users and tobacco contributes over $200 billion to government treasuries annually around the world, according to British American Tobacco (BAT), the global cigarette and tobacco giant. Tobacco stocks as a group have only slightly outperformed the broader market. The benchmark MSCI ACWI Tobacco Index has posted a 1-year trailing total return of 7.4% compared with the Russell 1000's total return of 5.6% as of March 11, 2022.

Here are the top 3 tobacco stocks with the best value, fastest growth, and most momentum. All statistics in the tables below are also as of March 11, 2022.

Best Value Tobacco Stocks

These are the tobacco stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

Best Value Tobacco Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Imperial Brands PLC (IMBBY) 20.14 19.1 4.9
Vector Group Ltd. (VGR) 10.13 1.6 7.1
Japan Tobacco Inc. (JAPAY) 8.53 30.3 8.4

Source: YCharts

  • Imperial Brands PLC: Imperial Brands is a U.K.-based consumer goods company. It sells cigarettes, smokeless tobaccos, papers, and related products. Its products are available throughout the world.
  • Vector Group Ltd.: Vector Group is a holding company that, through its subsidiaries, manufactures and markets cigarette products. The company is also involved in real estate projects through one of its subsidiaries. In early March, Vector Group reported results for Q4 2021, ended Dec. 31. For that period, the company reported net income growth of 40.3% and total revenues growth of 9.2% year-over-year (YOY).
  • Japan Tobacco Inc.: Japan Tobacco is a Japan-based tobacco company. It produces and sells tobacco products in Japan and internationally. It also develops, produces, and sells medical drugs, processed foods, and other products.

Fastest Growing Tobacco Stocks

These are the top tobacco stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with EPS or revenue growth of over 2,500% have been excluded as outliers.

Fastest Growing Tobacco Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
RLX Technology Inc. (RLX) 1.49 2.0 N/A (see company description) 17.7
Swedish Match AB (SWMAY) 7.33 11.4 21.0 14.9
PT Hanjaya Mandala Sampoerna Tbk (PHJMF) 0.06 7.4 -27.9 10.4

Source: YCharts

  • RLX Technology Inc.: RLX Technology is a China-based company focused on e-vapor products and services. The company engages in scientific research, technology and product development, distribution, and related services. It offers rechargeable e-vapor products in retail outlets, through distributors, and via customer representatives. For Q4 2021, RLX Technology reported net income of $77.6 million compared with a net loss for the prior-year quarter, as net revenues climbed YOY. The company cited optimization of distribution and retail channels, as well as new product development, as reasons for the growth. RLX Technology's EPS went from negative to positive during the period, making a calculation of EPS growth impossible in the table above.
  • Swedish Match AB: Swedish Match is a Swedish tobacco company that develops, manufactures, and sells products across three segments: Smokefree, Cigars, and Lights. Most of the company's sales are in the U.S. and Scandinavia. In March, Swedish Match announced that would suspend previous plans for a spin-off of its cigar business due to supply chain challenges and lackluster U.S. cigar sales.
  • PT Hanjaya Mandala Sampoerna Tbk: PT Hanjaya Mandala Sampoerna Tbk is an Indonesia-based maker of clove cigarettes. The company manufactures, markets, and distributes cigarettes in Indonesia. it also distributes the international cigarette brand Marlboro in Indonesia.

Tobacco Stocks with the Most Momentum

These are the tobacco stocks that had the highest total return over the last 12 months.

Tobacco Stocks with the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
British American Tobacco PLC (BTI) 39.86 91.2 16.4
Altria Group Inc. (MO) 50.48 91.7 13.5
Imperial Brands PLC (IMBBY) 20.14 19.1 12.5
Russell 1000 N/A N/A 5.6
MSCI ACWI Tobacco Index N/A N/A 7.4

Source: YCharts

  • British American Tobacco PLC: British American Tobacco is a U.K.-based holding company. It provides consumer goods across multiple categories, including tobacco and nicotine products. British American Tobacco offers vapor products, tobacco heating products, modern oral products, and traditional tobacco products.
  • Altria Group Inc.: Altria Group is a holding company that, through its subsidiaries, manufactures and sells cigarettes, machine-made large cigars and pipe tobacco, as well as moist smokeless tobacco products. In late February Altria announced a quarterly dividend of $0.90 per share, payable on April 29 to shareholders of record as of March 25, 2022.
  • Imperial Brands PLC: See above for company description.

The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Article Sources
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  1. British American Tobacco. "The Global Market."

  2. Vector Group Ltd. "Vector Group Reports Fourth Quarter and Full Year 2021 Financial Results."

  3. RLX Technology Inc. "RLX Technology Announces Unaudited Fourth Quarter and Fiscal Year 2021 Financial Results."

  4. Swedish Match AB. "Swedish Match provides update on plans for separation of its cigar business."

  5. Altria Group Inc. "Altria Declares Regular Quarterly Dividend of $0.90 Per Share."

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