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Highlights
- Medicines and Healthcare products Regulatory Agency (MHRA) approved the use of e-cigarettes to be prescribed by doctors.
- Recently, British American Tobacco received US Food and Drug Administration (FDA) approval for its e-cigarette Vuse and flavoured nicotine pods.
- Imperial Brands recommended a dividend of 42.12 pence per share for the half-year period ended 31 March 2021.
England-based Medicines and Healthcare products Regulatory Agency (MHRA) approved the use of e-cigarettes to be prescribed by doctors. The updated guidance approves medicinally licensed e-cigarettes as a prescription medicine for people who want to give up smoking. This is the first of its kind approval in any country to aid people to quit tobacco smoking. About 7% of the total adult population in Britain are considered to use e-cigarettes.
The manufacturers will be able to file for regulatory checks and approvals for the use of e-cigarettes by the National Health Service (NHS). Although smoking rates have declined to record low figures in Britain, it resulted in the death of about 64,000 people in England in 2019. The Ministry has also issued a warning that states regulated e-cigarettes are not risk-free but are less harmful than smoking tobacco.
Rising interest in e-cigarettes will prompt key cigarette and tobacco companies to diversify into manufacturing vaping products. British American Tobacco has recently received FDA approval for its e-cigarettes.
Below is a detailed review of the investment prospect in two FTSE-listed, dividend-paying cigarette stocks - British American Tobacco and Imperial Brands.
(Data source: EODHD/Others & company release)
British American Tobacco Plc (LON: BATS)
British American Tobacco is an FTSE 100 listed firm engaged in manufacturing and selling tobacco, cigarettes, and other nicotine products. Recently, British American Tobacco received US Food and Drug Administration (FDA) approval for its e-cigarette Vuse and flavoured nicotine pods that would be used along with it.
The shares of British American Tobacco closed at GBX 2,584.50, down by 0.58% on Thursday, 28 October 2021. The market cap of the company currently stands at £59,649.49 million.
British American Tobacco’s revenue was £12,175 million in H1 ended 30 June 2021, down by 0.8% year-on-year. Its operating profit was £4,907 million in the same period, representing a 3.7% decline year-on-year.
British American Tobacco announced an interim dividend of 215.6 pence per share, payable in equal quarterly equal instalments.
Imperial Brands Plc (LON: IMB)
Imperial Brands is a tobacco company engaged in manufacturing, marketing, and selling cigars, cigarettes, pipes and smokeless tobacco, etc.
The shares of Imperial Brands closed at GBX 1,553.50, down by 1.83% on Thursday, 28 October 2021. The market cap of the company currently stands at £14,976.91 million.
For the half-year ended 31 March 2021, Imperial Brands revenue rose by 6.1% year-on-year to £15,568 million compared to £14,672 million in 2020. Its operating profit was £1,637 million, fuelled by the disposal of the Premium Cigar division.
Imperial Brands recommended a dividend of 42.12 pence per share for the half-year period ended 31 March 2021, up from the previous year’s 41.70 pence per share.
