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Since the discovery of tobacco and cigarettes, tobacco companies have played a vital role in the markets of major countries. Although some have diminished in their significance, they have always been a real catch for investors. Throughout the whole 20th century, tobacco companies were successful. Their profit from the sale was among the highest in the whole world. The reason for that was a high demand for cigars and tobacco products. And that is what has attracted investors across the world.

That has remained to these days, and tobacco companies are still enjoying a high reputation. The stock with the highest profit on the market between 1968 and 2017 was the Marlboro brand. Between that period, their growth annually was on average 20%. Despite the fact that their global growth is somewhat lower today, they are not to be underestimated.

So, if you are willing to find out more about the tobacco industry and its powerful companies, stay with us.

Tobacco Companies

Tobacco Companies are global industries whose business is based on the sale of tobacco products. They spread it across all world continents since they can grow tobacco in any moist and warm surrounding, except for Antarctica. They base all of their products on tobacco which is one of the most used substances today.

Tobacco originated from the Americas, and it is also representing one of the most vital crops there. Tobacco is an agricultural product that is very similar to agricultural food products. The price gap is small and partially depends on the crops. And the quantity would depend on the temperature. Tobacco was the main foodstuff between 1617 and 1793. It was shipped to the United States and the USA from the English colonies. The price depends on various factors, such as the growing cultures and the estimated volume of tobacco ready to be marketed. But, it still attracts investors due to the high reliability of dividends and profit.

The standing of the Tobacco Companies in the USA

In the early 20th century, the whole US cigarette market was in the hand of the American Tobacco Company. They had to split into four smaller firms several years back, Lorillard, RJ Reynolds, American Tobacco, & Liggett & Myers. Also, the two new companies, Brown & Williamson and Philip Morris, showed up later. And by 1950, these companies controlled the US cigarette market.

The most powerful Tobacco Companies

Now that we have got through the basics of the Tobacco Companies, let’s talk about the world’s most powerful Tobacco Companies.

There are a lot of tobacco companies in the world; however, we will start with the top ten wealthiest Tobacco Companies in the World.

1.     Philip Morris International (PM)

Annual Revenue in 2020 is $11.67 Billion.

Philip Morris is the world leader when it comes to the production of heated tobacco products. The most famous product which is recognized by the whole world is Marlboro. The corporation that produces all of Altria’s brands, except for the U.S, has pinned hopes on nicotine goods with heat-non-burn (HNB). HNB devices are said to be safer than cigarettes because they don’t use cigarettes. Research, however, is still under discussion and the FDA has not confirmed that HNB devices are safer than cigarettes.

The sales volumes of cigarettes decreased by 10.7% over the first three quarters of 2020, while Sales of HTU increased by 27.9%. The IQOS brands still have a lot of runways; which means that they’re still considerably lower than the prices of conventional smokers.

As a dividend stock, Philip Morris doesn’t disappoint, either. Since its dividend in 2008 from Altria, the firm has boosted the dividend by 161% each year. And by December 2020, the share’s dividend rates are now healthy at 5.7% of the share price. It will be another Aristocrat Dividend including its roots as part of Altria. Taught from the Altria Group experience with the Juul; the company is aware that the same could happen with their IQOS devices. They have made a partnership with Altria to sell it better. Just like in Altria, the number of cigarettes in Philip Morris International has dropped down by 4,5% in 2019. Yet, the sale percentage of heated tobacco products has risen by 44.2%. And it is also showing the great potential of IQOS devices. By the end of 2019, they have increased them by 154%, which shows that they are great in their job.

Read More About Philip Morris International HERE. Or Sign up to buy and sell FREE Tobacco Companies ETFs commission, stock, and options.

2.     Altria Group (MO)

Annual Revenue in 2020 is $10.87 Billion.

Altria Group is a US enterprise and one of the biggest tobacco companies in the world. In recent times, their yearly growth and profit are falling by a few percent since all of their sales are coming from the US; where the smoking rates fell in the last years. According to the researches, the percentage of smokers fell from 21% in 2005 to 14% in 2018. And there is no wonder why the Altria Group is suffering from it. In 2019, the number of Altria’s cigarettes fell by 7.3%. And in the past year, it was between 4% and 6%. All of this has led this popular company to take some new steps. It seemed that these steps will lead to significant growth, it didn’t turn out that way.

In 2018, Altria invested $12.8 billion for the piece of Juul; but, since regulators have forbidden Juul to make most of its cigarettes, its value has fallen. From January 2020, they value their stake at $3.9 billion, which is less than 1/3 from the first one. At the same time, they have invested $1.8 billion in a Cronos Group; but their value has fallen by the 50% from March 2020.

Yet, this giant company still has a large profit from the dividends. In the last 50 years, they have raised them by 54 times, which makes them real masters of it. Knowing that their dividends are the main reason why investors are investing in their stocks, they have set a goal to reach a payment ratio of 80% per stock. From March 2020, their dividends have already reached 10.9%.

Read More About Altria Group HERE. Or Sign up to buy and sell FREE Tobacco Companies ETFs commission, stock, and options.

3.     British American Tobacco (BAT)

Annual Revenue in 2020 is $33.09 Billion.

The company is based in London, UK, and operates in all parts of the world. In June 2020, the group announced gross sales of nearly £12.3 billion (US$16.5 billion), while tobacco and other fuels accounted for 90% of its profits. It was established in 1902 in London, which is the headquarters of the company, and it remains so until today. In 2017, the company has purchased the Reynolds American company for the sum of $49 billion and become one of the world leaders in the tobacco industry.

They suffer from the decrease in the number of popular smokers along with the Altria Group and Philip Morris International. The profit from them was about $2 billion, but ordinary cigarettes are still bringing the bigger part. The main difference between British American Tobacco and the Altria Group is that they are operating in the whole world, not just the US. They are offering a wide spectrum of different products as well. 

Moreover, they are handling dividends well. In 2019, they were raised by 30% which allowed the company to secure the quarterly payout. BAT is focused on moving to next-generation drugs like most cigarette companies, for the most part. Last year, the market size of tobacco-hot products decreased by 4.7% and sales increased by 31.6%. By 2025, the company is aimed at 5 billion pounds a year in sales from next-generation goods (6.7 billion dollars on current exchange rates).

Read More About British American HERE. Or Sign up to buy and sell FREE Tobacco Companies ETFs commission, stock, and options.

4. Japan Tobacco International (JAPAY)

Annual Revenue in 2020 is ¥296 Billion.

Japan (JAPAY) is one of the wealthiest tobacco companies in the world and is owned by Japan Tobacco Group, a global company. The Corporation was established with many merger firms worldwide in 1999 as the Japan Tabacco Group expanded to the foreign market. In 1999, a global RJ Reynolds was acquiring in the Japan Tobacco Group. In 2007, JTI purchased Gallaher, another major tobacco producer. The home of JTI existed in Geneva and Switzerland.

JTI manufactures smoke, snuffing, electronic cigarettes, and cigars. It also manufactures waterpipe tobacco by acquiring companies, including the Al Nakhla company. JTI brands amount to over 100, including Winston, Mevius, Camel, Glamour, Benson & Hedges, Silk Cut (formerly known as Mild Seve), in addition to two cigarettes: Logic and Ploom, Amber Leaf, and Old Holborn rolled tobacco.

The market of the firm is highly globalized. JTI originates the tobacco leaf from 33 countries, produces its products in 26 countries, and sells in 130 countries. On its website, in 2020, the firm announced that its profit growth was constant, with an adjusted net profit of 3,493 million dollars and core revenues of 11,330 million dollars in 2018. JTI submitted that its brands account for 14% of the world market share that year.

Read More About by Japan Tobacco Group HERE. Or Sign up to buy and sell FREE Tobacco Companies ETFs commission, stock, and options.

5. Imperial Brands (IMBBY)

 Annual Revenue in 2020 is £3.3 Billion.

Imperial Brands PLC is a traveling business in the field of consumer products. There are a variety of cigars, smoking, and non-smoking tobacco products and articles available. The Tobacco Company and NGP consist of the production and selling of goods relating to Tobacco, including sales to the distribution company. Moreover, it also owns Imperial Brands, as well as a series of products and facilities for non-Tobacco & NGPs.

Read More About Imperial Brands HERE. Or Sign up to buy and sell FREE Tobacco Companies ETFs commission, stock, and options.

6. Vector Group (VGR)

Annual Revenue in 2020 is $2 Billion.

Vector Group Ltd.’s parent company is a holding corporation. The Company produces and sells cigarettes through its Liggett Group LLC (Liggett) and Vector Tobacco Inc. in the US. (Vector Tobacco) and real estate subsidiaries through its subsidiary New Valley LLC aim to buy or invest in additional assets or ventures. The Immobilien Division includes developments in the company in New Valley LLC. The Company holds and continues to gain ownership interests through debt and equity transactions in several home and foreign real estate developments.

Read More About Vector Group Ltd HERE. Or Sign up to buy and sell FREE Tobacco Companies ETFs commission, stock, and options.

7. Universal Holding (UVV)

Annual Revenue in 2020 is $71.7 Million Net Income.

Universal Corporation was established in 1918 and had its head office in Richmond, Virginia. Universal is the world’s leading tobacco dealer and processor through its branches and affiliates. It operates in over 30 countries and has more than 24,000 permanent and seasonal employees.

In the form of field and floor technicians, the firm selects and supports prospective and frequent farmers with farm inputs and technological safeguards. MLT has had a long-term relationship with Joao Ferreria Dos Santos, a local Mozambican/Portuguese firm, founded in the northern provinces of the world over a hundred years. The partnership was formed in the early 1990s and became one of the important tobacco companies, such that the quantity is reached. MLT started building a processing plant in Tete City in 2003. The installation has a total of 50,000 tons annually (6-8 months of operation).

Read More About Universal Corporation HERE. Or Sign up to buy and sell FREE Tobacco Companies ETFs commission, stock, and options.

8. Turning Point Brands (TPB)

Annual Revenue in 2020 is $405.11 Million

Turning Point Brands is an independent tobacco company in the United States. Net revenues rose 15.2% to $28.8 million for the fourth quarter, with double-digit increases in the MST (Moist Snuff Tobacco) segment and low-digit growth in loose leaf chewing tobacco.

In the year, MST accounted for 59% of Stoker’s sales from 54% a year ago. In the quarter, gross volume in the division of Stoker’s products rose 7.5% and price/mix up 7.7%. The Stoker Products branch raised its operating profit to $14.9 million in the quarter 18.5 percent. The gross margin segment improved to 51.7 percent by 150 basis points. Net revenue in the Stoker Products market rose to $115.9 million by 16.0 percent over the whole year, including double-digit MST growth and mid-digit growth for tobacco leaf chewing. The average amount of products in the Stoker market rose by 12.0% for the whole year and prices/blend increased by 4.0%. For the whole year, Stoker’s Gross Profit division rose to $61.5 million by 17.6 percent. The gross margin segment has expanded to 53.0% by 70 basis points.

Read More Turning Point Brands HERE. Or Sign up to buy and sell FREE Tobacco Companies ETFs commission, stock, and options.

9. 22nd Century Group (XXII)

Annual Revenue in 2020 is $6.4 Million.

Tobacco, hemp/cannabis, and a third plant franchise are the world’s largest economic prospects in the 22nd Century, which reach 1.3 trillion dollars. The dramatic increase in its share price, as announced in March 2021, reflects its shareholders’ allegiance to the 22nd century. Within 90 days of ensuring an MRTP designation, the 22nd Century was ready entirely to unleash its brands VLN King and VLN Menthol King commercially, including brand recognition and brand awareness promotion.

Its net income amounted to $6.8 million in the first quarter of 2021, equivalent to $7.1 million in 2020. The gross income increased by $360 billion over the first quarter of 2021 to $647,000; the gross profit margin improved by 540 basis points. In the initial quarter of 2021, net losses amounted to $5.0 million compared with $4.0 million last year. The shift in net loss was caused by investments that anticipated the MRTP VLN appointment of the 22nd century. The adjusted EBITDA was losing up to $1.1 million for the first quarter of 2021, relatively the third quarter of 2020 to the adjusted EBITDA of €3.2 million.

With the currency, cash reserves, and short-term capital investments totaling $30.9 million at the end of the first quarter of 2021, the company’s financial status is solid, an increase of $8.6 million compared to $22.3 million on March 31, 2020. On March 12, 2021, the 22nd Company has declared that its gross net income was 11.8 million dollars as of completion, in February and March 2021, of the cash exercise of the warrants. The Company has no other warranties.

Read More About 22nd Century Group HERE. Or Sign up to buy and sell FREE Tobacco Companies ETFs commission, stock, and options.

Conclusion

Today, the tobacco companies are not as strong as before as smokers’ percentages are decreasing and people are becoming more mindful of the possible diseases caused by cigarette smoking. However, tobacco companies are trying to provide safer smoking through the different products of the next generation. And for now, they are good at it.

We hope that this article was helpful for you to better understand the position of the tobacco industry today and their companies as well.