After peaking at over $55, tobacco giant Altria (MO) plunged in the last month. The Food and Drug
Administration banned Altria’s Juul products. This is unusual. E-cigarettes pose no health danger. They
help smokers wean off their addiction.
Altria’s appeal filed in the D.C. Circuit court will avert the threat for now. The firm needs to review the
FDA’s market denial order and respond to it. Juul already provided plenty of documentation to the FDA
when it responded to its concerns. The FDA claimed that it failed to provide the necessary data.
Juul has a good case in its appeal. The company will have the evidence it needs to prove the product’s
safety.
Juul Competitors Benefit
Juul’s competitors will benefit from the ban. It has at least half a dozen vape suppliers from China sold in
the market today. Still, the FDA is scrutinizing Juul’s marketing. When settled, Juul may have limited
marketing options to promote demand.
Altria stock pays a solid $3.60 a share dividend. At a yield of nearly 9%, income investors are more than
compensated for holding this controversial stock. Juul has a good case to defend its product. Should it
win, MO stock will skyrocket. While waiting, shareholders get a steady income for taking the risk.
