However, declining customer counts and usage rates are weighing on the group. ITC has a rich history that traces back to 1910 as the Imperial Tobacco Company of India Limited, a subsidiary of British American Tobacco. The company initially focused on tobacco products and established its first cigarette factory in Bangalore in 1913. The company continues to innovate and expand its FMCG portfolio while focusing on sustainability initiatives.
Financial Health
The company posted net revenues of $5.26 billion, a 5.7% decline from the same period in 2024, attributed primarily to lower cigarette shipment volumes, which fell by 13.7%. Indeed, health organizations like the American Lung Association actively encourage localities to raise taxes on cigarettes and other tobacco products to discourage usage. Given the propensity of localities to use tax increases on cigarettes, the situation will likely only get worse for tobacco stocks. The tobacco industry fits this model, despite declines over time in the number of customers that use its products. The Tobacco industry has a total of 10 stocks, with a combined market cap of $487.09 billion, total revenue of $94.9 billion and a weighted average PE ratio of 22.45. Investing in tobacco stocks depends on your risk tolerance and investment goals.
IWP manufactures high-quality Katha and Cutch and offers products that meet the needs of a diverse customer base both domestically and internationally. The company is well-known for its high-quality products and reliable supply chain. Have you ever thought about the amount of money you spend on buying cigarettes? While the health implications are undeniable, the industry’s financial allure cannot be overlooked.
The primary advantage of investing in the top 10 tobacco stocks in India is their potential for stable returns, driven by consistent demand for tobacco products. These companies often have established market positions and strong brand recognition, providing a level of security for investors. Investing in tobacco stocks requires careful consideration and research. Start by understanding the tobacco industry’s dynamics and analyzing different companies within the sector. Look for market trends and financial reports to gauge their performance.
Price and Consensus: TPB
That’s because, though not strictly considered as consumer essentials, tobacco products remain in massive demand despite wide-scale pushback. Golden Tobacco Ltd is one of India’s oldest tobacco companies, engaged in the manufacturing and marketing of cigarettes and tobacco products. Known for brands like Panama and Chancellor, the company has a legacy in the Indian tobacco market and focuses on innovation and market expansion. The tobacco market, with its rich history and evolving landscape, continues to be a focal point for investors seeking both stability and growth opportunities. Regulatory changes, increasing health concerns, and declining smoking rates are some of the major risks involved when investing in tobacco stocks. The factor to consider when investing in tobacco stocks in India is the regulatory environment.
However, the science is still being debated, and the Food and Drug Administration (FDA) has not concluded that HNB devices are safer than cigarettes. The domestic manufacturer of Marlboro, Parliament, and Virginia Slims split from Philip Morris International in 2008. However, it still owns Philip Morris USA, the subsidiary that oversees Altria Group’s cigarette brands. Tobacco stocks as a group have had a difficult time in the past couple of years. Regulatory and consumer preference changes continue to plague the group. Despite this, adjusted diluted earnings per share (EPS) rose by 6% year-over-year to $1.23, surpassing analyst expectations of $1.19.
Altria vs British American Tobacco: How fast is the business shrinking?
In fact, during recessions, nicotine use can even increase as people look for ways to cope with added stress. For this article, we sifted through the online rankings to form an initial list of the 15 Tobacco and Cigarette Stocks. From the resultant dataset, we chose 10 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 1009 hedge funds in Q to gauge hedge fund sentiment for stocks. We have used the stock’s market cap as of April 25, 2025, as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
- ITC has a rich history that traces back to 1910 as the Imperial Tobacco Company of India Limited, a subsidiary of British American Tobacco.
- The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security.
- These ratings should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt.
- The company’s dedication to profitability and operational efficiency has solidified its market standing, reflecting a blend of traditional expertise and modern business practices.
Cigarettes dominate the tobacco consumption landscape, constituting over 90% of usage in the country and serving as the primary product within India’s tobacco market. Our final stock is Universal Corporation, a processor and supplier of leaf tobacco and plant-based ingredients globally. The majority of Universal’s business is the distribution of tobacco leaf, but it also has a sizable ingredient business serving food and beverage makers with various products. Philip Morris sells its products internationally, and generates about $31 billion in total revenue. The company was founded in 1987 and trades with a market capitalization of $154 billion.
Altria for the short term, Philip Morris for the long term
Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Zacks may license the Zacks Mutual Fund rating provided herein to third parties, including but not limited to the issuer.
Advantages Of Investing In Top 10 Tobacco Stocks in India?
Our experts picked 7 Zacks Rank #1 Strong Buy stocks with the best chance to skyrocket within the next days. This article originally published on Zacks Investment Research (zacks.com). Altria has an exemplary dividend history, having boosted its dividend for more than half a century consecutively, and qualifying it for the coveted title of Dividend King. The payout ratio is nearing 80%, but Altria’s predictable and high levels of free cash flow mean dividend safety concerns are minimal. Philip Morris looks like a good bet to outperform BAT, even with the gap in dividends. Here, the edge goes to Philip Morris because it’s growing faster, driving margin expansion, and has made more progress on next-gen products.
Sure Dividend
- A significant turning point in its history was when GPIL became a part of the Modi Enterprises group, leading to strategic changes in the company’s operations.
- Demand will almost certainly continue to decline as taxes and prices rise.
- On May 14th, 2025, Imperial Brands reported results for the first half of fiscal year 2025.
- With the first FDA MRTP authorization for a combustible cigarette, they aim to facilitate smoking reduction.
Investors should Best tobacco stocks recognize that other factors, such as financial health, management efficiency, and market trends, play crucial roles in determining the actual success of an investment. The Zacks Tobacco industry includes companies that manufacture and sell cigarettes as well as tobacco and nicotine-based products, such as cigars, snuffs and oral tobacco. Some companies also offer RRPs, such as e-cigarettes, vaping and heat-not-burn variants. A few of the firms are engaged in making devices and attachments needed in vaping and heat-not-burn products.
See More Zacks Research for These Tickers
Management has set a target payout ratio of 80% of earnings per share, knowing that its dividend is the main reason shareholders own the stock. As of April 2025, its dividend yield was an attractive 6.9%, and it paid a dividend of $1.02 per quarter. The cigarette maker’s annualized average return was 20% during that time.
Since its founding in 2005, Greenlane has not only championed quality and compliance but has also emerged as a pivotal force in the cannabis and vaping sectors. As we navigate through the evolving landscape of the tobacco industry, identifying stocks that not only withstand the test of time but also promise growth and stability is crucial. Although selling traditional cigarettes is highly profitable, the business is in decline and is expected to keep declining.
However, the vast majority of its revenue still comes from cigarettes. The company had been targeting 5 billion pounds (almost $6 billion) in revenue from next-gen products by 2025 but said it was unlikely to get there due to a crackdown on single-use products in the U.S. While the HNB process is similar to the one used by vaporizers and e-cigarettes, devices such as the IQOS use tobacco rather than the liquid made for vaporizers. This article will analyze the prospects of 5 of the largest tobacco stocks that we cover in the Sure Analysis Research Database.