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

Updated on June 17th, 2025 by Bob Ciura

As a business owner, selling products that have high profit margins along with strong brand awareness and an exceptionally loyal customer base is strongly desirable.

This allows for predictable revenue and high levels of profits over time.

The tobacco industry fits this model, despite declines over time in the number of customers that use its products.

Tobacco stocks are particularly attractive to income investors thanks to their generous dividends and defensive characteristics during economic downturns.

Tobacco stocks produce a lot of cash flow, but have very little capital expenditure needs, creating what could be considered perfect income stocks.

You can download a spreadsheet with all our tobacco stocks (along with important financial metrics such as dividend yields and price-to-earnings ratios) using the link below:

Click here to instantly download your free spreadsheet of all Tobacco Stocks now, along with important investing metrics.

Tobacco stocks are widely prized by income investors thanks to their high dividend yields, stable payouts and dividend increase streaks. However, declining customer counts and usage rates are weighing on the group.

This article will analyze the prospects of 5 of the largest tobacco stocks that we cover in the Sure Analysis Research Database.

Rankings are in order of projected total returns from lowest to highest.

You can instantly jump to any individual stock analysis by clicking on the links below:

Industry Overview: Declining Smoking Rates
Imperial Brands plc (IMBBY)
Philip Morris International (PM)
Altria Group (MO)
British American Tobacco (BTI)
Universal Corp. (UVV)

But first, we’ll take a look at the tobacco industry’s primary concern, which is declining tobacco usage.

Industry Overview: Declining Smoking Rates

The percent of the U.S. population that smokes is in a continuous decline, and has been for decades.

Source: American Lung Association

The percent of the U.S. smoking adult population has steadily declined from 42% in 1965, to just 11.6% as of 2021. The declines among the youth population have been even bigger.

Young people now have a smoking rate of about one in 25. This sort of decline in an industry’s customer group generally spells trouble for the companies that operate within it.

Other forms of tobacco usage have seen similar rates of decline, including smokeless tobacco. This has been the case with every demographic group, so it is widespread among all of the companies’ potential customers.

Not only are fewer people smoking, but the ones that do are smoking less than they used to.

Source: American Lung Association

The number of people smoking at least 15 cigarettes a day has plummeted in the past few decades. Today, the overwhelming majority of smokers use fewer than 15 cigarettes daily.

In other words, there are fewer customers for the industry. And, the ones that remain are using fewer products. This has negatively impacted demand from two directions.

This has led to much lower volumes of total cigarettes sold, producing a declining total to be split up among the various companies selling cigarettes.

An increasing number of U.S. states have significantly raised the tax on cigarettes to reduce their budget deficits, and to reduce the potential appeal of smoking for consumers.

Given the propensity of localities to use tax increases on cigarettes, the situation will likely only get worse for tobacco stocks.

In addition, pricing increases have the impact of reducing usage further. Demand will almost certainly continue to decline as taxes and prices rise.

Indeed, health organizations like the American Lung Association actively encourage localities to raise taxes on cigarettes and other tobacco products to discourage usage.

To make matters worse for tobacco companies, most of the world’s smoking population rate looks much the same as the above chart. It has become abundantly clear that consumers around the world are eschewing tobacco products for health concerns.

These negative trends have kept many investors away from tobacco stocks. However, tobacco stocks can still generate solid total returns given that they tend to offer high dividend yields.

The key behind an investment in tobacco stocks is the inelastic demand for cigarettes relative to their price due to the addictive nature of these products.

Tobacco companies have been able to raise their prices to help offset declining smoking rates. As a result, they have exceptional growth records.

In addition, population growth partly offsets the effect of the declining percent of smokers.

However, investors must keep in mind that the total volumes for the industry are in fairly steep decline, and all indications are that this is irreversible.

Tobacco Stock #5: Imperial Brands plc (IMBBY)

5-year expected returns: 1.8%

Imperial Brands is a tobacco company that was founded in 1901. Today, it is headquartered in the United Kingdom. The company manufactures and sells a variety of tobacco products, including cigarettes, tobaccos, cigars, rolling papers, and tubes.

Some of its core brands include Winston, Davidoff, Gauloises, L&B, Bastos, Fine, Gitanes, Kool, Jade, and many more.

The company is organized into two operating segments, tobacco and logistics. The tobacco segment includes the manufacture and sale of its various tobacco products, while the logistics segment distributes tobacco to product manufacturers.

On May 14th, 2025, Imperial Brands reported results for the first half of fiscal year 2025. For the period, net revenue declined 3.1% on a reported basis. Revenue for tobacco and next generation products were up 3.2% as pricing and mix added 5.9% to results, offset by a 3.2% decline in volume.

Total tobacco market share improved in three out of five top markets. Improvements in the U.S. (+10 basis points), Germany (+65 basis points), and Australia (+5) was partially offset by the U.K. (-70 basis points) and Spain (-90 basis points).

Imperial Brands reaffirmed its prior guidance for fiscal year 2025, with revenue still projected to grow by low single-digits.

Click here to download our most recent Sure Analysis report on IMBBY (preview of page 1 of 3 shown below):

Tobacco Stock #4: British American Tobacco (BTI)

5-year expected returns: 2.8%

British American Tobacco is one of the largest tobacco companies in the world. It owns the following tobacco brands, among others: Kool, Benson & Hedges, Dunhill, Kent, and Lucky Strike.

British American Tobacco reported its fourth-quarter and full-year earnings results on February 13. During the year, British American Tobacco was able to generate revenues of 25.9 billion Pound Sterling, which was down by around 5% compared to one year earlier.

On an adjusted organic basis, revenues were up by 1.3%, but the company was negatively impacted by currency exchange rate movements. Its revenue from New Categories, which includes vapes and other non-smokable products, grew by a solid 9% on a currency-adjusted basis, relative to one year earlier.

Thanks to strong pricing, British American Tobacco was able to grow its gross profit slightly faster compared to its revenue.

British American Tobacco earned $4.57 during fiscal 2024 (363 pence), which represents an increase of 4% on a currency-adjusted and organic basis.

Click here to download our most recent Sure Analysis report on BTI (preview of page 1 of 3 shown below):

Tobacco Stock #3: Universal Corporation (UVV)

5-year expected returns: 6.0%

Universal Corporation is a market leader in supplying leaf tobacco and other plant-based inputs to consumer product manufacturers.

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

Universal buys tobacco from its suppliers, processes it, and sells it to large tobacco companies in the US and internationally.

Source: Investor Presentation

The Ingredient Operations deal mainly with vegetables and fruits but is significantly smaller than the tobacco operations.

Universal Corporation reported its fourth quarter earnings results in June. The company generated revenues of $702 million during the quarter, which was considerably less than the revenues that Universal Corporation generated during the previous period. Revenues were also down on a year-over-year basis.

This was a weaker performance compared to the last couple of quarters, when Universal was able to grow its revenues on a year-over-year basis. Overall, 2025 was a year during which the company grew its revenues by 7%.

Universal’s adjusted earnings-per-share totaled $0.80 during the quarter, which was way weaker than the results seen in the previous quarter, when Universal generated a substantially larger profit. In all of fiscal 2025, Universal Corporation saw its earnings-per-share pull back by close to 10%.

Click here to download our most recent Sure Analysis report on UVV (preview of page 1 of 3 shown below):

Tobacco Stock #2: Altria Group (MO)

5-year expected returns: 6.1%

Altria is a tobacco stock that sells cigarettes, chewing tobacco, cigars, e-cigarettes, and more under a variety of brands, including Marlboro, Skoal, and Copenhagen, among others.

The company also has a 35% investment stake in e-cigarette maker JUUL, and a 45% stake in the cannabis company Cronos Group (CRON).

This is a period of transition for Altria. The decline in the U.S. smoking rate continues. In response, Altria has invested heavily in new products that appeal to changing consumer preferences, as the smoke-free category continues to grow.

Source: Investor Presentation

The company also has a 35% investment stake in e-cigarette maker JUUL, and a 45% stake in the Canadian cannabis producer Cronos Group (CRON).

On April 29, 2025, Altria Group reported its financial results for the first quarter of 2025. The company posted net revenues of $5.26 billion, a 5.7% decline from the same period in 2024, attributed primarily to lower cigarette shipment volumes, which fell by 13.7%.

Despite this, adjusted diluted earnings per share (EPS) rose by 6% year-over-year to $1.23, surpassing analyst expectations of $1.19.

In the smokeable products segment, net revenues declined by 5.8%, but adjusted operating companies income increased by 1.2%, driven by higher pricing and lower manufacturing costs.

The oral tobacco products segment saw a 0.5% increase in net revenues, supported by an 18% rise in nicotine pouch shipments.

Click here to download our most recent Sure Analysis report on Altria (preview of page 1 of 3 shown below):

Tobacco Stock #1: Philip Morris International (PM)

5-year expected returns: 7.2%

Philip Morris International was spun off from Altria in 2008, and is charged with the production and distribution of Altria’s products outside of the United States. This distribution includes the Marlboro brand.

On April 23rd, 2025, Philip Morris reported its Q1 results for the period ending March 31st, 2025. For the quarter, the company posted net revenues of $9.3 billion, up 5.8% year-over-year. Adjusted EPS was $1.69, up 12.7% compared to Q1 2024. In constant currency, adjusted EPS grew by 17.3%.

Total shipment volumes were up 3.9% collectively, driven by strength in smoke-free categories. Notably, combustibles continued to show resilience, with volumes rising 1.1%.

Specifically, shipment volumes in cigarettes, heated tobacco, and oral products rose 1.1%, 11.9%, and 27.2%, respectively. Price increases, especially in combustibles, also played a key role in driving revenue.

Click here to download our most recent Sure Analysis report on Philip Morris International (PM) (preview of page 1 of 3 shown below):

Final Thoughts

Tobacco stocks as a group have had a difficult time in the past couple of years. Regulatory and consumer preference changes continue to plague the group.

But valuations are relatively low, dividend yields are high, and most companies are diversifying away from tobacco.

We see PM, UVV, and MO currently offering the highest expected total returns. And, all offer sizable dividend yields.

Dividend sustainability varies by stock in this group, but overall, there is a lot for income investors to like when it comes to these 5 tobacco stocks.

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