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. (PM) and Altria Group Inc. (MO), both of which sell products with dominant brand names. But tobacco stocks as a group have lagged the broader market. The benchmark MSCI All Country World Index Tobacco has posted a 1-year trailing total return of 3.9% compared with the Russell 1000's total return of 13.8% as of September 18.
Here are the top 3 tobacco stocks with best value, growth, and most momentum. All statistics below are as of September 21.
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|
|British American Tobacco PLC (BTI)||34.59||79.4||9.9|
|Universal Corp. (UVV)||43.30||1.1||14.1|
|Imperial Brands PLC (IMBBY)||17.84||16.9||15.7|
- British American Tobacco PLC: U.K.-based firm British American Tobacco operates as a holding company. Through subsidiaries, the company makes, markets, and sells cigarettes, cigars, roll-your-own tobacco, and related products.
- Universal Corp.: Universal is an independent leaf tobacco supplier. The company sells raw tobacco products to manufacturers around the world. It also has operations in other areas such as lumber and building materials. On September 8, Universal announced plans to acquire Silva International, a provider of dehydrated vegetable, fruit, and herb ingredients, for $170 million in cash.
- Imperial Brands PLC: British company Imperial Brands makes and sells cigarettes, cigars, pipes, smokeless tobacco, e-cigarettes, and other tobacco products. The company also operates a logistics business.
Tobacco Stocks With the Most Profit Growth or Least Profit Decline
These are the tobacco stocks with the highest year-over-year (YOY) earnings per share (EPS) growth or lowest EPS decline for the most recent quarter. A company’s ability to maintain profitability in a difficult business environment can be a sign of good management and/or a strong business model.
|Tobacco Stocks With the Most Profit Growth or Least Profit Decline|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Universal Corp. (UVV)||43.30||1.1||262.5|
|Altria Group Inc. (MO)||39.84||74.0||-2.8|
|Philip Morris International Inc. (PM)||78.08||121.6||-16.1|
- Universal Corp.: See above for company description.
- Altria Group Inc.: Altria Group is a holding company that, through subsidiaries, primarily sells cigarettes, cigars, pipe tobacco, and other tobacco products. On September 9, the company reaffirmed its full-year guidance, including YOY adjusted diluted EPS gains of 0% to 4%. Altria said that factors such as unemployment and government stimulus related to the COVID-19 pandemic had affected its guidance.
- Philip Morris International Inc.: Philip Morris International is a holding company that, through subsidiaries, licenses, makes, distributes, and sells branded cigarettes and tobacco products to customers worldwide.
Tobacco Stocks With the Most Momentum
These are the tobacco stocks that had the highest total return over the last 12 months.
|Tobacco Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Turning Point Brands Inc. (TPB)||29.99||0.6||19.2|
|Philip Morris International Inc. (PM)||78.08||121.6||16.4|
|Altria Group Inc. (MO)||39.84||74.0||6.0|
|MSCI All Country World Index Tobacco||N/A||N/A||3.9|
- Turning Point Brands Inc.: Turning Point Brands sells a range of tobacco products including vapor products, moist snuff, loose leaf chewing tobacco, and cigars. On September 8, the company announced that it had submitted to the U.S. Food and Drug Administration a set of premarket tobacco applications covering 250 potential new products. These products focus on alternatives to traditional cigarettes, including a large number related to vaping.
- Philip Morris International Inc.: See above for company description.
- Altria Group Inc.: See above for company description.
YCharts. "YCharts." Accessed Sept. 21, 2020.
Universal Corp. "Universal Corporation to Acquire Silva International, a Market-Leading Provider of Natural, Specialty Dehydrated Vegetable, Fruit and Herb Ingredients." Accessed Sept. 22, 2020.
Altria Group Inc. "Altria Participates in the Barclays Global Consumer Staples Conference; Reaffirms 2020 Full-Year Earnings Guidance." Accessed Sept. 22, 2020.
Turning Point Brands Inc. "Turning Point Brands Files Premarket Tobacco Applications Covering 250 Products." Accessed Sept. 22, 2020.