All articles tagged with #tobacco industry
British American Tobacco, despite a declining cigarette market, offers a nearly 10% dividend yield and strong cash flows, making it an attractive option for income investors. The company is also investing in new nicotine products to sustain future growth.
British American Tobacco, despite a declining cigarette market, offers a nearly 10% dividend yield and strong cash flows, making it an attractive option for income investors. The company is countering declining cigarette volumes with price hikes and expanding into new nicotine products like e-vapor and nicotine pouches, which are showing significant growth and profitability. This positions British American Tobacco to sustain and potentially grow its dividend payments in the future.
The 5th U.S. Circuit Court of Appeals ruled that the federal requirement for graphic images on cigarette packs and advertising, depicting the harmful effects of smoking, does not violate the First Amendment. The court overturned a lower court order and kept alive a tobacco industry challenge, directing a review of whether the rule was adopted in accordance with the federal Administrative Procedure Act. The images, including those of smoke-damaged lungs and other smoking-related health issues, are aimed at increasing public awareness of the risks associated with smoking.
Altria Group, a high-yielding dividend stock, reported a decline in net revenue and earnings for the fourth quarter of 2023, but its payout ratio remains at 84%. The company plans to increase its dividend and expects adjusted diluted EPS and dividend growth until 2028. However, investors are skeptical due to the stock's decline and the company's heavy reliance on smokable products, which may pose a risk to its long-term revenue and profitability. While a dividend cut is not imminent, Altria's uncertain future suggests caution for long-term investors.
The CDC has relaunched its Tips From Former Smokers campaign, featuring stories of former smokers, including those affected by menthol cigarettes, to encourage people to quit smoking. The campaign aims to address the disproportionate impact of menthol cigarettes on marginalized communities and the worsening tobacco-related health disparities. The federal government is considering a ban on menthol cigarettes and flavored cigars, but the issue has stalled, frustrating anti-tobacco groups who see it as politics getting in the way of public health. Banning menthol cigarettes could save hundreds of thousands of lives, particularly in the Black community, and close the gap in lung cancer deaths between Black and White populations. The tobacco industry opposes the ban, citing potential criminal charges in Black communities, but public health and medical associations support the ban, emphasizing the devastating health toll caused by menthol cigarettes and flavored cigars.
Despite challenges from declining cigarette sales and illicit e-cigarettes, British American Tobacco and Altria Group continue to offer high dividend yields of 9.3% and 9.4% respectively. British American Tobacco's non-combustible product sales are growing, while Altria Group's NJOY brand is the only one approved by the FDA to sell a pod-based vapor product. Both companies have a history of raising their dividend payouts, and their dividends are likely to continue rising in the years ahead.
British American Tobacco (BAT) announced a $31.5 billion writedown as it acknowledges that its US cigarette brands have no long-term future due to stricter regulations and declining cigarette volumes. BAT's shares fell, and US-listed tobacco stocks were also impacted. The writedown marks the first time a major global tobacco firm has written off the value of its traditional cigarettes business in a major market like the US, highlighting the need for the industry to focus on alternatives. BAT plans to generate 50% of its revenues from non-combustibles by 2035 and expects its business from "new categories" to break even in 2023.
British American Tobacco (BAT) is writing down the value of its US cigarette brands, including Camel and Pall Mall, by approximately $31.5 billion, acknowledging the declining future of the traditional tobacco market. BAT cited stricter regulations, health risks, economic challenges, and the rise of illicit disposable vapes as factors contributing to the decline in cigarette volumes. The company will adjust the treatment of these brands on its balance sheet, recognizing their value for a finite lifetime of 30 years. BAT's shares fell over 8% following the announcement. The company aims to generate 50% of its revenues from non-combustibles by 2025.
New Zealand's new right-leaning coalition government, formed by the National Party, has abandoned a groundbreaking plan to outlaw smoking for future generations, which was set to start in 2027. The move, supported by the right-wing ACT and populist New Zealand First parties, is seen as a retrograde step by health experts, who argue that it will cost the country billions of dollars in healthcare. The previous Labour government had passed legislation to gradually raise the legal age for buying tobacco, but the new government plans to repeal these laws and use increased tobacco sales revenue to cut income taxes. Critics argue that the reversal will disproportionately harm New Zealand's Indigenous Maori population, who have higher smoking rates and tobacco-related illnesses.
Altria (MO) reported Q3 earnings of $1.28 per share, missing the consensus estimate of $1.29 per share. The company's revenues for the quarter were $5.28 billion, falling short of the estimated $5.41 billion. Altria has not been able to surpass consensus EPS and revenue estimates over the past four quarters. The stock has underperformed the market this year, losing about 6.3%. The company's earnings outlook is unfavorable, resulting in a Zacks Rank #4 (Sell) for the stock. The tobacco industry, to which Altria belongs, is currently ranked in the bottom 12% of Zacks industries.
Altria, a tobacco company, reported non-GAAP EPS of $1.28, missing expectations by $0.02, and revenue of $5.28 billion, missing expectations by $150 million. Despite declining cigarette volumes and a challenging macro-environment, Altria's dividend remains strong at around 9%. Investors have mixed opinions on the company's future, with some seeing it as a buying opportunity while others express concerns about the industry's decline.
The UK government has proposed a ban on younger generations ever buying cigarettes, with the smoking age rising by one year every year. If passed into law, this move could phase out smoking among young people by 2040, making the UK one of the countries with the toughest smoking rules. The proposal has been welcomed by academics and campaigners but has caused shares of major tobacco companies to fall. The tobacco industry warns of unintended consequences and a potential increase in black market trade. Other countries, such as New Zealand and Denmark, are also considering similar measures to reduce smoking rates.
Despite widespread awareness of the dangers of smoking, the smoking aesthetic is making a comeback, with celebrities like Dua Lipa and Lily-Rose Depp flaunting cigarettes. This trend is particularly popular among young people, who are drawn to the rebellious counterculture associated with smoking. However, experts warn that social smoking is not as harmless as it seems, as it can easily lead to addiction. Health organizations are concerned that celebrities promoting smoking imagery are undoing years of anti-smoking efforts and influencing others to take up the habit. Studies show that exposure to smoking in entertainment increases the likelihood of young people trying smoking. Critics argue that entertainers have a responsibility to find healthier forms of expression and send a more positive message.
H. Lee Sarokin, a federal judge who famously freed boxer Rubin "Hurricane" Carter and presided over a landmark liability case against tobacco companies, has died at the age of 94. Sarokin was nominated to a federal judgeship by former President Jimmy Carter and served on the district court in New Jersey from 1979 to 1994 and the appeals court from 1994 to 1996. He issued some 2,500 rulings over his career, among them deciding that a homeless man couldn’t be barred from a public library because of his smell. In retirement, Sarokin was a regular contributor to HuffPost and wrote a dozen plays with themes of social justice and civil rights that were staged by the regional North Coast Repertory Theater.
Australia is set to ban recreational vaping and tighten e-cigarette laws in an effort to curb teenage vaping. The government aims to ban all disposable vapes, limit nicotine levels, and confine the sale of vapes to helping smokers quit. Vapes will only be sold in pharmacies and require "pharmaceutical-type" packaging. The federal budget will include $155 million for measures to protect against the harm caused by tobacco and vaping. Australia has one of the toughest anti-smoking laws in the world.