Best Stock to Buy Right Now: Philip Morris International vs British American Tobacco The Motley Fool
E-cigarettes are becoming popular among the public, which poses a threat to traditional tobacco companies as it reduces their revenues. The best tobacco stocks based on one-year returns are Elitecon International Ltd, Godfrey Phillips India Ltd, NTC Industries Ltd, Sinnar Bidi Udyog Ltd, and ITC Ltd. The table below shows the tobacco stocks list based on a 1-month return. VST Industries Ltd has a legacy of delivering high-quality tobacco products. Its emphasis on innovation and consumer satisfaction has enabled it to maintain a competitive edge in the rapidly evolving market. This simple fact is why Altria and British American Tobacco have such high dividend yields.
Advantages of Investing in Tobacco Stocks in India
If you think in decades and not days, Philip Morris International, despite the lower yield, has clearly differentiated itself from its former parent. And if you have a buy-and-hold philosophy, it is likely to be the more attractive option for you because its business is much better positioned today. If you are looking at these two stocks with the idea of holding one for the long term, you’ll probably want to think carefully about the mistakes that Altria has made. That list looks increasingly like it includes spinning off Philip Morris.
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NTC Industries provides its products under 2 segments, tobacco and lifestyle. Despite its roots in tobacco, ITC has expanded into various sectors, including hospitality, paperboards, packaging and agri-business. Its cigarettes are manufactured in modern facilities across India, employing advanced technology and top-notch practices aligned with global standards. Even in international markets, ITC maintains high-quality standards and remains competitive in the cigarette business. We see the payout ratio at 80% of earnings for this year, fairly typical for a tobacco company.
Elitecon International Ltd
If you are considering dipping your toes into tobacco investments, today’s blog will help you analyze India’s top tobacco stocks, their performance and how they have evolved over the years. The tobacco industry is not banned primarily due to its significant economic contribution, including job creation and substantial tax revenue for governments. Additionally, tobacco consumption is a personal choice for adults, and many countries implement regulations rather than outright bans to manage public health concerns. The table below shows the historical performance of tobacco stocks in India based on 5-year CAGR. The table below shows the high dividend-yielding tobacco stocks in India.
Indeed, at some point, price increases are likely to make the declines worse. Catechu products are used as mouth fresheners, containing chewing tobacco and areca nuts, and are utilised for treating dysentery, acute viral hepatitis, diarrhoea, Best tobacco stocks ailments of the mouth, tonsils, etc. It is used as a vegetable tanning material or as an additive or preservative in various industries. Tobacco companies in India have consistently witnessed remarkable growth over the years, yielding substantial profits. The industry’s sheer magnitude is poised to expand further, with a projected compound annual growth rate (CAGR) of 11.94% by 2028. Gujarat and Andhra Pradesh emerged as the primary states for tobacco production, benefiting from favourable weather conditions.
- These tobacco stocks are two of the most appealing dividend stocks on the market today.
- 22nd Century Group, Inc. is pioneering tobacco harm reduction and plant biotechnology, developing reduced nicotine content tobacco products.
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- Adjusted earnings-per-share for the company came to $1.23, up 13% year-over-over year.
Investing in tobacco stocks in India can be appealing to certain investors due to the sector’s potential for stable returns and strong brand loyalty. These stocks may offer opportunities for income generation and growth, but they come with unique risks that need to be considered. The key features of the best tobacco stocks highlight their strong market presence, consistent demand for products, and their ability to generate steady cash flow.
High Dividend Yielding Tobacco Stocks In India
- 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.
- In fact, the most popular tobacco product, the cigarette, has come under intense scrutiny in recent years because of the negative health consequences of smoking.
- Headquartered in London, England, BAT has risen to become the world’s largest tobacco company by net sales as of 2021.
- The company also dabbles in real estate through its third subsidiary, New Valley.
- E-cigarettes are becoming popular among the public, which poses a threat to traditional tobacco companies as it reduces their revenues.
It was incorporated in India in 1936 and has been a significant contributor to the domestic tobacco market ever since. 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. GPIL has a strong portfolio of cigarette brands, such as Four Square, Red and White, Cavanders, Tipper, and North Pole.
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Philip Morris reported second quarter earnings on July 20, 2021, and results were mixed, beating consensus estimates for earnings, but falling short on the top line. The company reported total revenue of $7.6 billion, which was a 14% gain compared to the year-ago period. Shipment volume was up 6% year-over-year, as cigarette shipment volume was up 3%, and heated tobacco volumes soared 30%. The company has also ventured into other segments in the smoking category besides traditional tobacco, like the e-vapor product under its subsidiary NJOY and nicotine pouches under the U.S. Altria recently sent the premarket application for NJOY Ace 2.0, which includes access restrictions via Bluetooth to prevent underage use of the product via authentication.
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Despite regulatory challenges, tobacco company stocks can offer steady returns. However, investors should remain aware of the sector’s unique risks. Investors can streamline their search for tobacco stocks by using the Tickertape Stock Screener.
Price and Consensus: TPB
Universal released full-year earnings on May 26, 2021, and results were somewhat weak against the year-ago period. The company reported revenue of $620 million during the fourth quarter, which was about 2% lower than the comparable period a year ago. Leaf tobacco volumes fell slightly year-over-year, and the third quarter had demand pulled forward and inflated results for that period. In addition, MO stock pays a $3.92 forward annual rate, translating to an impressive 8.77% yield, making it one of the best tobacco stocks to buy. The company is also expanding NJOY’s global presence to match anticipated volume demands for e-cigarettes and related products.
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +23.62% per year. These returns cover a period from January 1, 1988 through June 2, 2025.
That’s a truly horrible number, but it was just a continuation of a trend in its core market. That’s hardly a massive success, but it is massively better than what Altria achieved and makes Philip Morris a far more attractive business. Philip Morris International (PM -0.39%) makes and sells Marlboro cigarettes. Philip Morris was spun off by Altria so the latter could focus entirely on the North American market. It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories. One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play.