Tobacco has been an important commercial product since Virginian colonists used it as currency in the 18th century. Native Americans have used tobacco in ceremonies since time immemorial.
I hate tobacco since my (nonsmoking) mother died of lung cancer caused by father’s second-hand smoke. But I continued to hold Altria (MO).
It’s important to understand that nicotine, while highly addictive, does not cause cancer. I recently told DH that I would pay for any nicotine products he needs to stop smoking. (He quit in May after a CT scan found nodules in his lungs.) Patches are safe but “smokeless” tobacco that contains whole tobacco is carcinogenic.
Because of the decades-long anti-tobacco campaign, cigarette smoking is finally declining among adults and young people. However, the use of e-cigarettes (vaping), heated tobacco products, and oral nicotine pouches has surged, especially among adolescents and young adults. The tobacco companies have shifted their strategies and product mixes to addict a new generation. They are also targeting low- and middle-income markets.
The large tobacco companies listed on the stock exchange are:
Altria Group (MO) which focuses on the U.S. market with cigarettes and some smokeless products. P/E Ratio: 12.8. Dividend Yield: 6.13%. MO is a cash cow.
Philip Morris International (PM) was spun off from Altria to focus on non-cigarette “smoke free” products. P/E Ratio: 24.72. Dividend yield: 3.23%
British American Tobacco (BTI) is a global leader that is actively pursuing its own “A Better Tomorrow” strategy, focusing on its range of new-category products like heated tobacco, vaping, and oral nicotine. P/E Ratio: 30. Dividend Yield: 5.70%.
All these companies have seen rising stock prices over the past 5 years.
The tobacco companies have innovated to expand market share with safer - but still addictive - products.
Wendy