Godfrey Phillips India is a leading tobacco manufacturer, producing popular cigarette brands like Four Square and Red & White. Apart from tobacco, the company has diversified into tea, confectionery, and retail. Tobacco companies, which sell addictive wares, generate predictable cash flows. This can capture investor interest because it means strong dividends that hedge against rising inflation.
- Tobacco stocks are widely prized by income investors thanks to their high dividend yields, stable payouts and dividend increase streaks.
- Some companies also offer RRPs, such as e-cigarettes, vaping and heat-not-burn variants.
- NTC is well known for its strong manufacturing capability and commitment to high-quality standards.
- Its dedication to traditional craftsmanship has helped maintain its strong market presence.
- Universal released full-year earnings on May 26, 2021, and results were somewhat weak against the year-ago period.
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Tobacco Stock #5: Imperial Brands plc (IMBBY)
These stocks are chosen based on their market capitalization, which represents the total value of a company’s outstanding shares. The selection is arranged in descending order, placing the largest companies first and the smaller ones later. Headquartered in Kolkata, NTC Industries is one of India’s oldest manufacturers of cigarettes and smoking mixtures. This brand has a huge presence in the domestic and international markets. It also supplies products like incense sticks and matchsticks which are necessary in daily lifestyle.
Philip Morris gained more freedom from U.S. litigation and regulation, while Altria could concentrate on the domestic market and better respond to a massive tobacco settlement with the U.S. government. The split also aimed at unlocking the potential of PMI’s faster-growing international business and improving financial flexibility for both companies. The breakup was the start of a string of mistakes for Altria that should leave long-term investors far more interested in Philip Morris. When it comes to dissecting the financial nuances of tobacco stocks, Wisesheets is your ace in the hole.
Vector Group’s journey from tobacco to real estate underscores its adaptability and vision, marking it as a unique entity in the corporate landscape. After finding success with IQOS internationally, Philip Morris paid $2.7 billion to acquire the rights from Altria to sell the product line in the U.S. Total shipment volumes were up 3.9% collectively, driven by strength in smoke-free categories. Notably, combustibles continued to show resilience, with volumes rising 1.1%. Not only are fewer people smoking, but the ones that do are smoking less than they used to.
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It’s raised its dividend 59 times in the past 55 years, effectively making it a Dividend King, an unofficial status due to its spin-off history. Unsurprisingly, Altria’s cigarette shipment volumes have slipped, too. Cigarette shipment volumes fell 10.2% in 2024 to 68.6 billion, and revenue declined 1.9% to $24 billion.
Most Expensive Share in India
The company also has a 35% investment stake in e-cigarette maker JUUL, and a 45% stake in the Canadian cannabis producer Cronos Group (CRON). The company also has a 35% investment stake in e-cigarette maker JUUL, and a 45% stake in the cannabis company Cronos Group (CRON). Thanks to strong pricing, British American Tobacco was able to grow its gross profit slightly faster compared to its revenue. British American Tobacco reported its fourth-quarter and full-year earnings results on February 13. During the year, British American Tobacco was able to generate revenues of 25.9 billion Pound Sterling, which was down by around 5% compared to one year earlier.
Who Should Invest in Tobacco Stocks India?
Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return.
RLX Technology Inc is a leading branded e-vapor company in China, known for its strong in-house technology, product development capabilities, and deep understanding of adult smokers’ needs. Vector Group Ltd. embodies diversification, with significant stakes in the tobacco and real estate sectors. Founded by Bennett S. LeBow in 1986, Vector has grown under the leadership of Howard Lorber, navigating the company through decades of transformation.
- With the landscape shifting beneath our feet, 2024 presents a unique set of challenges and opportunities for those eyeing the tobacco industry.
- The company manufactures and sells a variety of tobacco products, including cigarettes, tobaccos, cigars, rolling papers, and tubes.
- Thanks to strong pricing, British American Tobacco was able to grow its gross profit slightly faster compared to its revenue.
- Its initiatives reflect a dedication to responsible business practices and sustainable growth across its operations.
The FDA has been regulating vaping products since 2016, claiming that flavored vapes represent a health concern and may encourage young people to use tobacco. More than 2.1 million youths in the US reported using e-cigarettes in 2023, with 10% of high school students vaping. The FDA has rejected thousands of flavored products and has only approved tobacco and menthol flavors. One specific issue, marketing plan consideration, was returned to lower courts after the Supreme Court reversed the 5th Circuit’s prior criticism of the FDA’s changing criteria.
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Altria’s story is not just about tobacco; it’s about strategic evolution and diversification, aiming to stay ahead in a dynamic global market. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. The company claims that HNB devices are safer than regular cigarettes because they don’t burn tobacco.
Additionally, high excise duties and taxes on tobacco products affect profitability, pushing prices higher and potentially reducing sales volumes. Companies that effectively navigate these regulatory challenges may still thrive, but those unable to adapt might face financial strain. It is important to note that market capitalization in no way guarantees a company’s performance or Best tobacco stocks the returns from its stocks. However, it can be used as a criterion for shortlisting companies from within a sector.
This has been the case with every demographic group, so it is widespread among all of the companies’ potential customers. As a business owner, selling products that have high profit margins along with strong brand awareness and an exceptionally loyal customer base is strongly desirable. The Market Cap of Elitecon International Ltd is Rs. 6,182.20 crores. The Market Cap of Godfrey Phillips India Ltd is Rs. 37,892.55 crores. ITC Ltd is a diversified conglomerate with a strong presence in FMCG, hotels, paperboards, and packaging.
It has played a pivotal role in shaping India’s consumer goods sector with its extensive portfolio and innovative offerings. Altria’s cigarette volumes declined 9.7% in 2022, 9.9% in 2023, and 11.5% in the first half of 2024. In the first nine months of the year, the drop was 10.6%, but that period can’t be compared to British American Tobacco because the European company only reports semi-annually. British American Tobacco (BTI 1.86%) has an even higher yield of roughly 8%.
These stocks often represent companies with a dominant position in the tobacco industry. Our next stock is Altria, another manufacturer and distributor of cigarettes, smokeless tobacco, and tobacco alternative products in the U.S. The vast majority of Altria’s revenue, like Philip Morris, comes from cigarette sales. But like Philip Morris, Altria is also investing heavily in cigarette alternatives after having stated it will cease selling cigarettes within the next 10 years. One of those attributes is very low levels of capital expenditures, and high margins. This leads to very strong free cash flows, which the companies then return to shareholders via dividends in most cases.
New categories made up 12% of its revenue, and that share should continue to grow, given its 21% revenue growth rate in 2023. Historically, Philip Morris has operated outside the U.S. only as part of the company’s split from Altria in 2007. However, it just bought the rights to sell IQOS in the U.S. from Altria for $2.7 billion, indicating the company is bullish about the product. It’s also seen strong growth from Zyn, a branded oral nicotine pouch it gained in its acquisition of Swedish Match. These tobacco stocks are two of the most appealing dividend stocks on the market today.