2025 Tobacco Stocks List | The 5 Best Now, Ranked In Order

Up to date on April thirtieth, 2025 by Bob Ciura

As a enterprise proprietor, promoting merchandise which have excessive revenue margins together with robust model consciousness and an exceptionally loyal buyer base is strongly fascinating.

This enables for predictable income and excessive ranges of income over time.

The tobacco business suits this mannequin, regardless of declines over time within the variety of clients that use its merchandise.

Tobacco shares are significantly enticing to earnings buyers because of their beneficiant dividends and defensive traits throughout financial downturns.

Tobacco shares produce lots of money, however have little or no capital expenditure wants, creating what could possibly be thought of good earnings shares.

You’ll be able to obtain a spreadsheet with all our tobacco shares (together with vital monetary metrics equivalent to dividend yields and price-to-earnings ratios) utilizing the hyperlink beneath:

Tobacco shares are broadly prized by earnings buyers because of their excessive dividend yields, steady payouts and dividend improve streaks. Nonetheless, declining buyer counts and utilization charges are weighing on the group.

This text will analyze the prospects of 5 of the biggest tobacco shares that we cowl within the Positive Evaluation Analysis Database.

Rankings are so as of projected whole returns from lowest to highest.

Desk of Contents

You’ll be able to immediately soar to any particular person inventory evaluation by clicking on the hyperlinks beneath:

However first, we’ll check out the tobacco business’s major concern, which is declining tobacco utilization.

Business Overview: Declining Smoking Charges

The p.c of the U.S. inhabitants that smokes is in a steady decline, and has been for many years.

Supply: American Lung Affiliation

The p.c of the U.S. smoking grownup inhabitants has steadily declined from 42% in 1965, to only 11.6% as of 2021. The declines among the many youth inhabitants have been even greater.

Younger individuals now have a smoking fee of about one in 25. This form of decline in an business’s buyer group usually spells bother for the businesses that function inside it.

Different types of tobacco utilization have seen related charges of decline, together with smokeless tobacco. This has been the case with each demographic group, so it’s widespread amongst all the corporations’ potential clients.

Not solely are fewer individuals smoking, however the ones that do are smoking lower than they used to.

Supply: American Lung Affiliation

The variety of individuals smoking no less than 15 cigarettes a day has plummeted prior to now few many years. Immediately, the overwhelming majority of people who smoke use fewer than 15 cigarettes each day.

In different phrases, there are fewer clients for the business. And, those that stay are utilizing fewer merchandise. This has negatively impacted demand from two instructions.

This has led to a lot decrease volumes of whole cigarettes bought, producing a declining whole to be break up up among the many varied corporations promoting cigarettes.

An growing variety of U.S. states have considerably raised the tax on cigarettes to scale back their finances deficits, and to scale back the potential attraction of smoking for shoppers.

Given the propensity of localities to make use of tax will increase on cigarettes, the scenario will probably solely worsen for tobacco shares.

As well as, pricing will increase have the affect of decreasing utilization additional. Demand will nearly definitely proceed to say no as taxes and costs rise.

Certainly, well being organizations just like the American Lung Affiliation actively encourage localities to boost taxes on cigarettes and different tobacco merchandise to discourage utilization.

To make issues worse for tobacco corporations, many of the world’s smoking inhabitants fee seems to be a lot the identical because the above chart. It has change into abundantly clear that buyers world wide are eschewing tobacco merchandise for well being considerations.

These unfavourable developments have saved many buyers away from tobacco shares. Nonetheless, tobacco shares can nonetheless generate stable whole returns on condition that they have a tendency to supply excessive dividend yields.

The important thing behind an funding in tobacco shares is the inelastic demand for cigarettes relative to their worth because of the addictive nature of those merchandise.

Tobacco corporations have been capable of elevate their costs to assist offset declining smoking charges. In consequence, they’ve distinctive progress data.

As well as, inhabitants progress partly offsets the impact of the declining p.c of people who smoke.

Nonetheless, buyers should remember the fact that the entire volumes for the business are in pretty steep decline, and all indications are that that is irreversible.

Tobacco Inventory #5: Imperial Manufacturers plc (IMBBY)

5-year anticipated returns: -3.7%

Imperial Manufacturers is a tobacco firm that was based in 1901. Immediately, it’s headquartered in the UK. The corporate manufactures and sells quite a lot of tobacco merchandise, together with cigarettes, tobaccos, cigars, rolling papers, and tubes.

A few of its core manufacturers embrace Winston, Davidoff, Gauloises, L&B, Bastos, Advantageous, Gitanes, Kool, Jade, and lots of extra.

The corporate is organized into two working segments, tobacco and logistics. The tobacco phase consists of the manufacture and sale of its varied tobacco merchandise, whereas the logistics phase distributes tobacco to product producers.

Imperial Manufacturers’ future progress shall be fueled by its next-generation product line. This consists of vapor and heated tobacco merchandise, equivalent to its blu model. Imperial Manufacturers launched the myblu product in 2018.

As well as, the corporate is creating heated tobacco merchandise with client trials deliberate towards the tip of the yr. To assist finance its progress investments, the corporate is launching an aggressive price discount program.

Click on right here to obtain our most up-to-date Positive Evaluation report on IMBBY (preview of web page 1 of three proven beneath):

Tobacco Inventory #4: Altria Group (MO)

5-year anticipated returns: 5.0%

Altria is a tobacco inventory that sells cigarettes, chewing tobacco, cigars, e-cigarettes, and extra beneath quite a lot of manufacturers, together with Marlboro, Skoal, and Copenhagen, amongst others.

The corporate additionally has a 35% funding stake in e-cigarette maker JUUL, and a forty five% stake within the hashish firm Cronos Group (CRON).

It is a interval of transition for Altria. The decline within the U.S. smoking fee continues. In response, Altria has invested closely in new merchandise that attraction to altering client preferences, because the smoke-free class continues to develop.

Supply: Investor Presentation

The corporate additionally has a 35% funding stake in e-cigarette maker JUUL, and a forty five% stake within the Canadian hashish producer Cronos Group (CRON).

Altria Group reported stable monetary outcomes for the fourth quarter and full yr of 2024. For the fourth quarter, income of $5.1 billion beat analyst estimates by $50 million, and elevated 1.6% year-over-year. Adjusted EPS of $1.29 beat by a penny.

For the complete yr, Altria generated adjusted diluted EPS progress of three.4% and returned over $10.2 billion to shareholders by way of dividends and share repurchases.

For 2025, Altria expects adjusted diluted EPS in a variety of $5.22 to $5.37. This represents an adjusted diluted EPS progress fee of two% to five% for 2025.

Click on right here to obtain our most up-to-date Positive Evaluation report on Altria (preview of web page 1 of three proven beneath):

Tobacco Inventory #3: British American Tobacco (BTI)

5-year anticipated returns: 5.1%

British American Tobacco is likely one of the largest tobacco corporations on the planet. It owns the next tobacco manufacturers, amongst others: Kool, Benson & Hedges, Dunhill, Kent, and Fortunate Strike.

British American Tobacco reported its fourth-quarter and full-year earnings outcomes on February 13. In the course of the yr, British American Tobacco was capable of generate revenues of 25.9 billion Pound Sterling, which was down by round 5% in comparison with one yr earlier.

On an adjusted natural foundation, revenues have been up by 1.3%, however the firm was negatively impacted by forex alternate fee actions. Its income from New Classes, which incorporates vapes and different non-smokable merchandise, grew by a stable 9% on a currency-adjusted foundation, relative to at least one yr earlier.

Due to robust pricing, British American Tobacco was capable of develop its gross revenue barely quicker in comparison with its income.

British American Tobacco earned $4.57 throughout fiscal 2024 (363 pence), which represents a rise of 4% on a currency-adjusted and natural foundation.

Click on right here to obtain our most up-to-date Positive Evaluation report on BTI (preview of web page 1 of three proven beneath):

Tobacco Inventory #2: Common Company (UVV)

5-year anticipated returns: 6.6%

Common Company is a market chief in supplying leaf tobacco and different plant-based inputs to client product producers.

The Tobacco Operations phase buys and sells tobacco used to make cigarettes, cigars, pipe tobacco, and smokeless merchandise.

Common buys tobacco from its suppliers, processes it, and sells it to massive tobacco corporations within the US and internationally.

Supply: Investor Presentation

The Ingredient Operations deal primarily with greens and fruits however is considerably smaller than the tobacco operations.

Common Company reported its third quarter earnings ends in February. The corporate generated revenues of $937 million through the quarter, which was greater than the revenues that Common Company generated through the earlier interval.

Revenues have been positively impacted by product combine adjustments, whereas bigger and better-yielding crops additionally had a optimistic affect on the corporate’s top-line. Common Company’s revenues additionally rose on a year-over-year foundation, exhibiting a 14% improve.

Click on right here to obtain our most up-to-date Positive Evaluation report on Common (preview of web page 1 of three proven beneath):

Tobacco Inventory #1: Philip Morris Worldwide (PM)

5-year anticipated returns: 8.6%

Philip Morris Worldwide was spun off from Altria in 2008, and is charged with the manufacturing and distribution of Altria’s merchandise outdoors of america. This distribution consists of the Marlboro model.

On April twenty third, 2025, Philip Morris reported its Q1 outcomes for the interval ending March thirty first, 2025. For the quarter, the corporate posted web revenues of $9.3 billion, up 5.8% year-over-year. Adjusted EPS was $1.69, up 12.7% in comparison with Q1 2024. In fixed forex, adjusted EPS grew by 17.3%.

Whole cargo volumes have been up 3.9% collectively, pushed by energy in smoke-free classes. Notably, combustibles continued to indicate resilience, with volumes rising 1.1%.

Particularly, cargo volumes in cigarettes, heated tobacco, and oral merchandise rose 1.1%, 11.9%, and 27.2%, respectively. Value will increase, particularly in combustibles, additionally performed a key function in driving income.

Click on right here to obtain our most up-to-date Positive Evaluation report on Philip Morris Worldwide (PM) (preview of web page 1 of three proven beneath):

Remaining Ideas

Tobacco shares as a gaggle have had a tough time prior to now couple of years. Regulatory and client desire adjustments proceed to plague the group.

However valuations are comparatively low, dividend yields are excessive, and most corporations are diversifying away from tobacco.

We see PM, UVV, and BTI at the moment providing the very best anticipated whole returns. And, all provide sizable dividend yields.

Dividend sustainability varies by inventory on this group, however total, there’s a lot for earnings buyers to love in the case of these 5 tobacco shares.

Additional Studying

In case you are fascinated by discovering high-quality dividend progress shares appropriate for long-term funding, the next Positive Dividend databases shall be helpful: