Tobacco stocks such as Ultria or British American tobacco have a number of advantages. In fact, the business model with glossy sticks was once defensive. Only moral doubts prevent investors from buying shares.
Dividends in stocks such as Altria or British American tobacco have been popular for decades. For example, the American group is now a royal deployment. BAT, on the other hand, is becoming an aristocratic payer. There is no question about this: quality and quantity are now available.
However, it is becoming more and more clear that the cigarette industry is on the edge. There are also stocks such as Ultria or British American tobacco. As current reports show, even the US government seems to be serious.
Ultria, PAT & Co .: Low Nicotine in Glossy Sticks …?
In particular the Wall Street Journal now reports that there may be a novelty within the cigarette industry in the United States, at least it is being discussed. Accordingly, the government is considering reducing the nicotine content in cigarettes to an addictive level. An option to adequately respond to health risk.
Definitely a burden for Altria, British American tobacco and other cigarette companies. Especially since menthol cigarettes were banned in the United States. With such a move, health policy could improve. One reason why Altria shares fell about 8% at the start of the week.
Of course, they are still projects. However, with catastrophic consequences. Accordingly, key executives of companies such as Renault (part of the PAT group) or Altria have commented on the initial situation. They argue that too much black market share or the loss of hundreds of thousands of jobs. Will it help or will there be lasting changes in the tobacco industry? The coming months or years will show it.
The tobacco industry is about to change direction
However, this shows another shift in direction in the tobacco industry. As well as manufacturers such as Altria and British American tobacco. The health policy of the industrialized nations of the West is increasingly aimed at the fight against cigarettes and tobacco products. Decreased nicotine content may be another characteristic of this expression.
And the United States is not the only market that can be controlled. Plans have been leaked to reduce supply in Europe as well. As well as continuing to reduce the proportion of smokers with price arguments. This does not seem to be the case for the tobacco industry.
Now investors who want to bet on stocks like Altria or PAT should be aware of the great risk. It is not enough to look at good and very generous dividends. It’s about the overall package and dark prospects of the company.
Article Altria, PAT & Co .: In the United States, Cigarettes Hit the Collar! The Modley Fool first appeared in Germany.
The Motley Fool has a company that is very popular among analysts. This is the best investment for us in 2021.
You can benefit from it. To do this, you must first know about this unique company. That’s why we’ve now put together a free special report detailing this company.
Vincent holds shares in British American tobacco. There is no position on any of the shares referred to by Motley Fool.
Motley Fool Deutschland 2021
Photo: Getty Images