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. Tobacco stocks as a group have significantly lagged the broader market. The benchmark MSCI ACWI Tobacco Index has posted a 1-year trailing total return of 32.4% compared with the Russell 1000's total return of 74.3% as of March 16.
Here are the top 3 tobacco stocks with the best value, fastest growth, and most momentum. All statistics below are as of March 16.
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)||19.90||18.8||9.8|
|British American Tobacco PLC ( BTI)||37.92||87.0||10.7|
|Philip Morris International Inc. (PM)||88.20||137.4||17.1|
- 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.
- 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. On March 11, British American Tobacco announced that it had acquired a 19.9% stake in Organigram Inc., a wholly-owned subsidiary of publicly-traded Organigram Holdings Inc. (OGI), a Canada-based licensed producer of cannabis products. The acquisition is part of British American Tobacco's efforts to diversity its offerings. The investment is valued at roughly £126 million (roughly $175.2 million).
- 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. The company's board of directors on March 4th declared a quarterly dividend of $1.20 per common share, payable on April 9 to shareholders of record as of March 22.
These are the tobacco stocks with the highest year-over-year (YOY) operating income, also called operating earnings, growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders. Operating income excludes non-operating income and expenses (such as investment gains or losses), one-time items, as well as interest and taxes. This helps investors get a clearer picture at the strength of the underlying business without the effect of unusual one-off events, such as large tax credits, asset sales, or lawsuit settlements. If you decided to invest in a company, it's still important to look at these one-off non-operating expenses and incomes, as they can still influence a company's overall financial health.
|Fastest Growing Tobacco Stocks|
|Price ($)||Market Cap ($B)||Operating Income Growth (%)|
|Vector Group Ltd. ( VGR)||14.53||2.2||89.6|
|Universal Corp. ( UVV)||56.11||1.4||81.7|
|PT Hanjaya Mandala Sampoerna Tbk ( PHJMF)||0.11||12.8||37.9|
- Vector Group Ltd.: Vector Group is a holding company which, through subsidiaries, makes and sells cigarettes. The company also operates a real estate business. The company's net income more than tripled YOY for Q4 2020, while revenue climbed by 26.2% over the same period. The company's tobacco subsidiary Liggett helped to drive performance with record operating income for the quarter.
- Universal Corp.: Universal Corp. is a leaf tobacco merchant offering tobacco and other agri-products as well as the distribution of lumber and building materials. The company serves cigarette manufacturing customers around the world.
- PT Hanjaya Mandala Sampoerna Tbk: PT Hanjaya Mandala Sampoerna Tbk is an Indonesia-based manufacturer of cigarette products. Through subsidiaries, the company also develops properties. The company sells its products around the world.
These are the tobacco stocks that had the highest total return over the last 12 months.
|Tobacco Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Kaival Brands Innovations Group Inc. ( KAVL)||2.28||0.6||4,650|
|Turning Point Brands Inc. ( TPB)||50.99||1.0||233.0|
|Universal Corp. (UVV)||56.11||1.4||51.5|
|MSCI ACWI Tobaco Index||N/A||N/A||32.4|
- Kaival Brands Innovations Group Inc.: Kaival Brands Innovations Group is a blank check company. It acquires businesses and assets via merger, capital stock exchange, acquisition, or similar methods. The company is the exclusive global distributor of vaping products from BIDI Vapor. On February 24, Kaival Brands announced that BIDI Vapor's flagship BIDI Stick product had advanced to the final stage of review by the U.S. Food and Drug Administration.
- Turning Point Brands Inc.: Turning Point Brands sells tobacco products including vapor products, moist snuff, loose leaf chewing tobacco, and cigars. On February 23, the company's board of directors declared a regular quarterly dividend of $0.055 per common share, payable on April 9 to shareholders of record as of March 19. This represents a 10% increase over the previous quarterly dividend.
- Universal Corp.: 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.
YCharts. "YCharts." Accessed Mar. 17, 2021.
British American Tobacco PLC. "BAT enters strategic R&D collaboration to accelerate ‘beyond nicotine’ strategy with Organigram." Accessed Mar. 17, 2021.
Philip Morris International Inc. "Philip Morris International Inc. Declares Regular Quarterly Dividend of $1.20 Per Share." Accessed Mar. 17, 2021.
Vector Group Ltd. "Vector Group Reports Fourth Quarter and Full Year 2020 Financial Results." Accessed Mar. 17, 2021.
Kaival Brands Innovations Group Inc. "BIDI Vapor Advances to Final Substantive Review Phase of the FDA PMTA Process For All 11 BIDI Stick Flavors." Accessed Mar. 17, 2021.
Turning Point Brands Inc. "Turning Point Brands Increases Common Stock Dividend." Accessed Mar. 17, 2021.