Dividends and Tobacco Marketing

When the author was growing up the majority of people smoked cigarettes, when adulthood was reached the number fell into the minority. Cigarette smoking is legal, a good deal of the price is taxes and people still smoke. This is in contrast to a John Hopkins University study which looked at the effects of tobacco smoking on children in low and middle income countries. A survey of 400 children in Shanxi province in China found 71% of the households had at least one smoker. From a marketing point of view 86% could identify at least one brand of cigarette. 22% said they intend to smoke; in India the number was 30% and in countries of Nigeria, Pakistan and Russia similar numbers were arrived at.

Linking to dividend paying stocks, some of the best growth and dividend paying stocks are the cigarette companies. From a medical perspective the numbers generally mean health costs in the countries surveyed with rise, from an investment in cigarette companies – the above numbers indicate the companies have a rosy future. It cost pennies to make cigarettes and they sell for dollars or the profit margins are high. In many higher income countries, the ability to market is restricted, but not in every country as the survey shows. As China and other countries continue to generate a larger middle income group, there continues to a very healthy demand for nicotine sticks or cigarettes and opportunities to look at health companies to treat the cigarette smokers.

There are more questions than answers, till next time – to raising questions

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