18 Jul The Complete List of Tobacco Stocks on the NYSE

Management has set a target payout ratio of 80% of earnings per share, knowing that its dividend is the main reason that shareholders own the stock. The next stock on our list is Imperial Brands, a British tobacco product conglomerate that was founded in 1901. Today, the company is a market leader in a variety of locations around the globe and produces just over $10 billion in annual revenue.

• J. Reynolds Tobacco Company, American Snuff Company (formerly Conwood Company), Santa Fe Natural Tobacco Company, and Niconovum AB.
• Like other tobacco companies, BAT is focused on substantially transitioning to next-gen products.
• In fact, it’s stated goal is to continue to increase market share of its Liggett brand and maximize long-term profitability in that market.

Throughout the 20th century, tobacco stocks were among the best performers, benefiting from an addictive, highly profitable, recession-proof product, plus a reputation for offering generous dividend yields to investors. We see Altria, British American Tobacco, and Vector as offering the best total returns. Dividend sustainability varies by stock in this group, but overall, there is a lot for income investors to like when it comes to these 6 tobacco stocks.

In fact, it’s stated goal is to continue to increase market share of its Liggett brand and maximize long-term profitability in that market. Excluding the acquisition of Swedish Match, net revenues still grew by an impressive 10.5%. Shipment volume was up 3.3% collectively, with cigarette shipment volume down 0.4% and heated tobacco, a much smaller portion of the business, up 26.6% year-over-year. Indeed, health organizations like the American Lung Association actively encourage localities to raise taxes on cigarettes and other tobacco products to discourage usage. Altria is taking a stake in the global business of Swiss tobacco company Burger Söhne (Helix Innovations with the On! brand) for $372 million on June 2019. This is the list of the largest public listed companies in the Tobacco industry from the United States by market capitalization with links to their reference stock.

Instead, Universal purchases, processes, and sells a wide variety of different types of leaf tobacco, including flue-cured, burley dark air-cured, and oriental tobacco. The company works directly with tobacco cultivators to help provide support in their agricultural pursuits, as well as offering research on best practices along with financing opportunities. The company boasts operations on five continents and expects to facilitate production of more than 5.2 billion kilograms of leaf tobacco of all types during 2019. Given that BAT is seeing many of the same downward trends in traditional cigarette usage that its peers around the world have suffered, these alternative products will become increasingly important for the company’s continuing success. Since its split from Altria in 2008, the company has raised its dividend every year, and its dividend had increased by 172% as of July 2022. If its history as part of Altria were included, it would qualify as another Dividend Aristocrat.

Top publicly traded tobacco and cigarette companies by revenue

However, the company isn’t blind to the changing dynamics of the tobacco industry. Its Universal Enterprises unit offers products including pure liquid nicotine for vaping and other alternative uses, as well as services related to laboratory testing of vapor and next-generation tobacco products. The Universal Ingredients business even goes beyond tobacco, making fruit and vegetable products that match up well with the consumer trend toward natural ingredients. List of the largest publicly traded tobacco and cigarette companies by revenue. Tobacco stocks as a group have had a difficult time in the past couple of years.

• As the fourth-largest cigarette manufacturer in the U.S., Vector’s Liggett Group subsidiary is the company behind key discount cigarette brands like Pyramid, Grand Prix, Eve, and Eagle 20’s.
• Ultimately, as discussed above in the section on the risks of tobacco stocks, regulators are likely to decide the fate of the tobacco industry, so future interest in the stocks may fade.
• Tobacco companies need to find new ways to grow and diversify their businesses.
• The company is the wholesale purchaser and processor of tobacco that operates as an intermediary between tobacco farms and the companies that manufacture cigarettes, pipe tobacco, and cigars.

Other forms of tobacco usage have seen similar rates of decline, including smokeless tobacco. 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 9 Biggest Tobacco Stocks

Pyxus is still small, and its revenue from leaf tobacco has been falling over the years. If cannabis and related markets can bring it back from the brink, however, then Pyxus shareholders might end up getting the last laugh. The three tobacco companies discussed above all specialize in marketing consumer tobacco products to their customers. Universal, however, prides itself on not manufacturing any tobacco products for direct consumer use.

Altria Group

Today, the overwhelming majority of smokers use fewer than 15 cigarettes daily. This has led to much lower volumes of total cigarettes sold, producing a declining total to be split up among the various companies selling cigarettes. The tobacco industry fits this model, despite declines over time in the number of customers that use its products. Tobacco stocks are particularly attractive to income investors thanks to their generous dividends and defensive characteristics during economic downturns. Tobacco stocks produce a lot of cash, but have very little capital expenditure needs, creating what could be considered perfect income stocks. List of the largest publicly traded largest inverse gold etf by earnings.

Moreover, Pyxus is also branching out to adjacent industries like cannabis and hemp as well. Turning Point Brands hasn’t been around that long as a publicly traded stock, with its IPO having happened just in 2016. But its history dates back to the late 1980s, when a leveraged buyout of the other products division of tobacco manufacturer Lorillard led to the creation of the business. Having worked with large numbers of tobacco farmers, Universal can make sure that it matches up its supply of leaf tobacco with the demand needs of its clients. The company also makes sure that its tobacco supply meets regulatory compliance guidelines at prices that are competitive on the global market, while delivering products that also match up with the specifications of each customer. The fact that Universal has relationships across the globe to connect growers to tobacco product manufacturers has been a key component of its competitive advantage.

Tobacco Stock #2: British American Tobacco (BTI)

Reynolds American, Inc. is an American tobacco company which is a subsidiary of British American Tobacco[5] and is the second-largest tobacco company in the United States.[6] Its holdings include R. J. Reynolds Tobacco Company, American Snuff Company (formerly Conwood Company), Santa Fe Natural Tobacco Company, and Niconovum AB. For smaller players internationally, the difficulties in obtaining shares can be even greater.

Philip Morris International was spun off from Altria in 2008, and is charged with the production and distribution of Altria’s products outside of the United States. But first, we’ll take a look at the tobacco industry’s primary concern, which is declining tobacco usage. In 2008, Altria officially moved its headquarters from New York City to Richmond, Virginia, after Philip Morris sold its downtown offices in New York City a decade earlier.

Tobacco companies need to find new ways to grow and diversify their businesses. The COVID-19 pandemic has had an impact on the industry, forcing plant shutdowns and slowdowns, and it even affected duty-free sales for Philip Morris. Altria’s 9.5% stake in Anheuser-Busch InBev (BUD 3.25%) gave it additional exposure to the crisis; alcohol contracted significantly when bars and restaurants around the world closed. Still, as part of the consumer staples sector, the tobacco industry won’t suffer any lasting scars from the pandemic. Stock prices for tobacco companies have mostly recovered since their sharp declines at the beginning of the pandemic. Unlike some of the others we’ve looked at, Vector is making no attempt to diversify away from cigarettes.

British American Tobacco

Universal acquired FruitSmart, an independent specialty fruit and vegetable ingredient processor. FruitSmart supplies juices, concentrates, blends, purees, fibers, seed and seed powders, and best commodity etf other products to food, beverage and flavor companies around the world. The percent of the U.S. smoking adult population has steadily declined from 42% in 1965 to just 14% as of 2018.

Its adjusted diluted earnings per share came in at $1.18, up 5.4% year-over-year, while its net revenues declined by 2.9% year-over-year. Management reaffirmed its 2023 full year guidance range of adjusted diluted earnings per share of between $4.98 and $5.13, reflecting a potential growth range of 3-6% year-over-year. British American Tobacco announced its first-half pre-close trading update, its Q1 earnings report equivalent, on June 6. The company does not announce exact numbers in its pre-close trading updates, but comments on the overall performance of the business. Year-to-date, British American Tobacco has gained some volume share in the combustible market, primarily due to increased marketing efforts in the United States. Vector Group is an unusual combination of a real estate investment firm and a tobacco company.

Its high operating profit margin, which topped 40% in 2021, helps to ensure the dependability of the quarterly payout. The same month that Altria took a stake in Juul, it acquired 45% of Cronos Group for $1.8 billion and made the company its exclusive partner for cannabis. metatrader web In June 2022, the FDA said it would ban Juul in the U.S., although a lawsuit kept the ban from being immediately enforced. Juul has also faced a difficult regulatory environment in international markets and pulled out of five European countries in 2020.

The continued legalization of marijuana means growth for companies in this sector. Considering what happened with Juul, the IQOS brand runs a similar risk of regulatory crackdown internationally and in the U.S., where Philip Morris has partnered with Altria to sell the product line.