3 Tobacco Stocks Gaining Traction in 2024

The tobacco industry is subject to strict regulations around the world due to health hazards and the addictive and harmful nature of tobacco. However, the sector remains well poised for long-term growth due to the launch of smoke-free and other innovative products such as e-cigarettes and nicotine pouches.

Considering the industry’s inelastic product demand and its capacity to innovate in response to consumer needs while adhering to regulatory standards, investing in fundamentally strong tobacco stocks Vector Group Ltd. (VGR – Get Rating), Universal Corporation (UVV – Get Rating), and British American Tobacco p.l.c. (BTI – Get Rating) could be wise.

Before diving deeper into their fundamentals, let’s discuss why the tobacco industry is well-positioned for growth.

Despite the health risks associated with tobacco consumption, their consumption remains steady worldwide. The industry continues to face challenges like increased taxes, stringent regulations, heightened health-related concerns, etc.

However, the addictive nature of tobacco, changing lifestyles, and rising disposable incomes are contributing to the industry’s growth. Moreover, tobacco companies are now banking on safer alternatives such as snus, e-cigarettes, and nicotine pouches to drive growth and appeal to a new customer base.

Due to increased awareness of safe and smoke-free alternatives, the global e-cigarette and vape market is set to reach $182.84 billion by 2030, growing at a CAGR of 30.6%.

Additionally, the consistent demand for tobacco ensures consistent performance through economic cycles. The global tobacco market is projected to exceed $627 million in 2024, growing at a CAGR of 3.4%. The market is further expected to expand to $878 million by 2034.

Considering these conducive trends, let’s analyze…

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