Top Tobacco Stocks for Q1 2021

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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 significantly lagged the broader market. The benchmark MSCI ACWI Tobacco Index has posted a 1-year trailing total return of 0.4% compared with the Russell 1000’s total return of 22.2% as of December 8.

Here are the top 3 tobacco stocks with best value, growth, and most momentum. All statistics below are as of December 9.

Best Value Tobacco Stocks

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) 20.65 19.6 10.1
British American Tobacco PLC (BTI) 38.80 89.0 11.1
Philip Morris International Inc. (PM) 82.64 128.7 16.7

Source: YCharts

  • Imperial Brands PLC: British company Imperial Brands makes and sells cigarettes, cigars, pipes, smokeless tobacco, e-cigarettes, and other tobacco products. The company also operates a logistics business. The company’s full year 2020 results, published on November 17, show group net revenue rose 0.8% year-over-year (YOY) while tobacco volume declined 2.1%. Imperial Brands said that sub-optimal product and market mix hurt the company’s gross profit.
  • British American Tobacco PLC: U.K.-based firm British American Tobacco operates as a holding company. Through subsidiaries, the company makes, markets, and sells cigarettes, cigars, roll-your-own tobacco, and related products.
  • Philip Morris International Inc.: Philip Morris International is a holding company that, through subsidiaries, licenses, makes, distributes, and sells branded cigarettes and tobacco products to customers worldwide. On December 10, the company declared a quarterly dividend of $1.20 per share of common stock, to be paid on January 11, 2021.

Fastest Growing Tobacco Stocks

These are the tobacco stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.

Fastest Growing Tobacco Stocks
  Price ($) Market Cap ($B) EPS Growth (%)
Turning Point Brands Inc. (TPB) 42.48 0.8 29.0
PT Hanjaya Mandala Sampoerna Tbk (PHJMF) 0.13 15.5 27.4
Philip Morris International Inc. (PM) 82.64 128.7 21.3

Source: YCharts

  • Turning Point Brands Inc.: Turning Point Brands sells tobacco products including vapor products, moist snuff, loose leaf chewing tobacco, and cigars. In late October, the company announced that it had made a $15 million strategic investment in dosist, a cannabinoid company with fast-growing global sales. As part of the deal, Turning Point and dosist will co-develop and distribute a new national cannabinoid brand. Turning Point has an option to invest another $15 million within the next year.
  • PT Hanjaya Mandala Sampoerna Tbk: PT Hanjaya Mandala Sampoerna Tbk is an Indonesia-based manufacturer of cigarette products. Through subsidiaries, the company also develops properties. The company sells its products around the world.
  • Philip Morris International Inc.: See above for company description.

Tobacco Stocks With the Most Momentum

These are the tobacco stocks that had the highest total return over the last 12 months.

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