Amid several headwinds, like heightened health consciousness among individuals, stringent government regulations, and higher taxation, tobacco usage has declined over the years. However, tobacco firms have responded by introducing low-risk alternatives with potential promise for the industry owing to their broad acceptance.
Given this backdrop, fundamentally strong tobacco stocks Imperial Brands PLC (IMBBY – Get Rating), Universal Corporation (UVV – Get Rating), and Japan Tobacco Inc. (JAPAY – Get Rating) could be solid buys this month.
The detrimental health impacts of smoking, which encompass a broad range from Cancer to chronic obstructive pulmonary disease (COPD) such as emphysema, are no secret. Despite this, the gripping, addictive properties of nicotine lead many to persist with their smoking habits, even with the full understanding of these risks.
Despite the rigorous regulations imposed by numerous countries to clamp down on tobacco consumption, the tobacco industry maintains its relentless expansion. Persistently high rates of smoking and consistent demand for tobacco products underpin the growth of this industry. A staggering 28 million American adults are cigarette smokers. Over a little more than a decade, there has been an increase in the frequency of habitual smokers among senior citizens, rising from 8.7% to 9.4%.
Moreover, in response to the obstacles faced, the tobacco corporations are intensifying their efforts to tackle the issues by championing safer alternatives like snus, e-cigarettes, and pouches. The global e-cigarette and vape market is poised to reach $59.17 billion by 2031, growing at a CAGR of 14.2%, fueled by increasing awareness of safe, smokeless alternatives to traditional tobacco offerings.
The global tobacco market is projected to expand at a CAGR of 2.6% to reach $1.10 trillion by 2030.
With these favorable trends in mind, let’s delve into the fundamentals of the three Tobacco stock picks, beginning with…
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