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 lagged the broader market. The benchmark MSCI ACWI Tobacco Index has posted a 1-year trailing total return of 25.0% compared with the Russell 1000’s total return of 37.1% as of Sept. 14, 2021.
Here are the top 3 tobacco stocks with the best value, fastest growth, and most momentum. All statistics in the tables below are as of Sept. 14, 2001.
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)||21.42||20.3||5.4|
|Vector Group Ltd. (VGR)||12.44||1.9||9.8|
|British American Tobacco PLC (BTI)||36.85||84.6||10.0|
- Imperial Brands PLC: Imperial Brands is a U.K.-based consumer goods company that makes and sells cigarettes, cigars, pipes, smokeless tobacco, e-cigarettes, and other tobacco products. The company also operates a logistics business.
- Vector Group Ltd.: Vector Group is a holding company that, through its subsidiaries, manufactures and markets cigarette products. The company is also involved in real estate, holding investments in various real estate projects through one of its subsidiaries. On Aug. 23, Vector Group announced a quarterly cash dividend of $0.20 per share, payable on Sept. 29 to shareholders as of Sept. 15, 2021.
- British American Tobacco PLC: British American Tobacco is a U.K.-based holding company. Through its subsidiaries, the company makes, markets, and sells cigarettes, cigars, roll-your-own tobacco, oral nicotine pouches, and related products. BBC Panorama, in a Sept. 2021 report, said that evidence suggested that BAT negotiated a bribe for former longtime Zimbabwean leader Robert Mugabe. Other allegations in the report include that the company paid bribes in South Africa and that it used illegal surveillance. According to BBC Panorama, BAT contested the accuracy of several key aspects of the story. While BAT declined to answer BBC Panorama’s questions about the Zimbabwe payments, it did not deny paying a bribe to Mugabe, who died in 2019. It is against UK law for a British company to pay bribes anywhere.
These are the top tobacco stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Tobacco Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|RLX Technology Inc. (RLX)||5.05||7.9||1,040||291.5|
|Vector Group Ltd. (VGR)||12.44||1.9||281.2||63.7|
|Turning Point Brands Inc. (TPB)||47.58||0.9||49.0||16.8|
- RLX Technology Inc.: RLX Technology is a China-based e-vapor products company. The company is involved in scientific research, product development, offline distribution, and related activities for rechargeable vape products. The company’s net income grew by more than 800% YOY for Q2 2021, driven by RLX’s focus on technology investment and brand building.
- Turning Point Brands Inc.: Turning Point Brands is a manufacturer and distributor of branded consumer products, including cigars, rolling papers, cigar wraps, chewing tobacco, vapor products, and more.
- Vector Group Ltd.: See above for company description.
These are the tobacco stocks that had the highest total return over the last 12 months.
|Tobacco Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|TAAT Global Alternatives Inc. (TAAT.CX)||CA$4.45||CA$0.4||273.9|
|Turning Point Brands Inc. (TPB)||47.58||0.9||54.0|
|Imperial Brands PLC (IMBBY)||21.42||20.3||33.0|
|MSCI ACWI Tobacco Index||N/A||N/A||25.0|
- TAAT Global Alternatives Inc.: TAAT Global Alternatives is a Canada-based health and wellness company. TAAT produces hemp-based tobacco alternatives that are nicotine- and tobacco-free. In early September, the company announced that its new facilities in the area of Las Vegas, Nevada were operational, providing significant added operational space and production resources. In recent months, TAAT has announced new purchase orders for distribution in the United Kingdom, Ireland, and Australia, in addition to distribution in seven new U.S. states.
- Turning Point Brands Inc.: See above for company description.
- Imperial Brands PLC: See above for company description.
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YCharts. “YCharts.” Accessed Sept. 15, 2021.
Vector Group Ltd. “Vector Group Declares Quarterly Cash Dividend.” Accessed Sept. 15, 2021.
British American Tobacco PLC. “British American Tobacco negotiated bribe for Mugabe, new evidence suggests.” Accessed Sept. 15, 2021.
RLX Technology Inc. “RLX Technology Announces Unaudited Second Quarter 2021 Financial Results.” Accessed Sept. 15, 2021.
TAAT Global Alternatices Inc. “New TAAT™ Facilities Now Operational, Tobacco Wholesalers in Germany, Poland, France, and Switzerland Acclaim Reconstituted Beyond Tobacco™ Formulation.” Accessed Sept. 15, 2021.