Tobacco Companies and Christian Investing: The Philip Morris Case

Philip Morris International (PM) and Altria (MO) are the two largest publicly traded tobacco companies in the world. Altria is the US business, including Marlboro domestically, Copenhagen smokeless tobacco, and a minority stake in Anheuser-Busch InBev. Philip Morris International sells Marlboro and other brands outside the US and is the dominant player in heated tobacco products like IQOS. Together they represent hundreds of billions in market cap and decades of some of the best total returns in public markets.

They are also, without any exception I am aware of, excluded from every major Biblically Responsible Investing fund. Let me explain why and address the elephant in the room, which is that tobacco stocks have historically crushed the market.

The screen is straightforward

BRI funds that have a tobacco exclusion screen for companies whose primary business is producing or distributing tobacco products. PM and MO are pure-play tobacco companies. There is no ambiguity, no revenue threshold debate, no "well, tobacco is only 12 percent of revenue." Both companies are essentially all tobacco, all the time.

So the exclusion is unanimous. ETGLX does not own them. BIBL does not own them. Timothy Plan does not own them. GuideStone does not own them. Praxis does not own them. Every BRI fund I have ever looked at excludes these two names completely.

The biblical argument

1 Corinthians 6:19-20, "do you not know that your body is a temple of the Holy Spirit within you, whom you have from God? You are not your own, for you were bought with a price. So glorify God in your body." This is probably the verse most commonly cited in BRI discussions of tobacco.

You can push back and say that 1 Corinthians 6 is specifically about sexual immorality in context, and yes, that is the immediate context. But the principle that the body is a temple to be cared for rather than destroyed has been extended by Christian teachers for centuries to cover behaviors that cause systematic harm to the body, including heavy drinking, drug abuse, and tobacco use.

Proverbs 14:30 on physical health, Proverbs 24:12 on God weighing the heart and knowing what we have done, and Romans 14:21 on not doing things that cause others to stumble also get referenced. The common theme is that a business model built on causing predictable, documented, scalable harm to the people who use the product is a different moral category than selling bread or making cars.

The scale of the harm

Some data points that BRI funds usually cite when they explain the tobacco exclusion.

Tobacco use kills about 480,000 Americans per year according to the CDC. Globally, the WHO estimates around 8 million deaths per year attributable to tobacco.

Secondhand smoke causes an additional significant number of deaths among non-smokers, including children in households where parents smoke.

Tobacco addiction is among the hardest chemical dependencies to break. Most smokers who try to quit fail multiple times, and the physical withdrawal is real.

The marketing practices of tobacco companies throughout the 20th century included deliberate deception about health risks. The Tobacco Master Settlement Agreement of 1998 was the result of litigation that documented decades of the industry hiding evidence and targeting young people.

BRI funds treat all of this as a business model that is unredeemable by normal shareholder engagement. You can not make a tobacco company stop selling tobacco without ending the company. The only consistent response is exclusion.

The performance problem

Here is where it gets interesting and where the temptation comes in. If you go back to, say, 1990 and compare the total return of Altria (and its corporate predecessors) to the S&P 500, Altria wins. By a lot. One famous Wharton study calculated that Altria was the best-performing US stock of the 1925 to 2003 period when you include dividends reinvested.

The reasons are well known. Tobacco companies generate massive cash flow. They pay high dividends (Altria's yield has hovered in the 7 to 10 percent range for years). The stocks trade at low multiples because institutional investors, ESG funds, and BRI funds avoid them, which keeps valuations cheap and yields high. High yields reinvested over decades compound into crushing returns.

So if you are willing to own tobacco, you can make a very good argument that it will outperform the broader market over long horizons. Some investors do exactly this and sleep fine.

Why BRI funds do not take the bait

The short answer is that BRI funds do not think a good return is a sufficient reason to own a company whose products cause 8 million deaths a year. The compounding math is real, but the moral math is also real.

The longer answer involves a few considerations.

First, the moral premium exists precisely because people with moral objections refuse to own these stocks. If BRI funds joined the tobacco rally for the returns, the moral premium would compress, the yield advantage would shrink, and the financial argument would weaken. The conviction is part of what creates the opportunity, which is a weird philosophical situation.

Second, the returns are real but they are not the only consideration. Matthew 16:26, "For what will it profit a man if he gains the whole world and forfeits his soul?" Jesus is specifically asking about the cost-benefit tradeoff between financial gain and moral compromise. BRI funds see the tobacco question as a direct application of that verse.

Third, the BRI movement did not start because people thought sin stocks would underperform. It started because Christians wanted their money to not fund certain industries. The performance was never the point. Sometimes it works out, sometimes it does not. Treating it as a performance strategy misses the whole reason BRI exists.

The "but I can donate more" argument

Some Christians argue, "I will own tobacco stocks, make more money, and give the extra to charity." This is a genuine theological debate. On one side, the logic is that the end use of capital matters and if the profit goes to good work, the ownership is not fatal. On the other side, the logic is that there is no amount of charitable giving that cleanses ownership of an enterprise built on systematic harm.

BRI funds take the second position. The first position is defensible but has some obvious risks (it is easy to rationalize ownership if you tell yourself "I will give more" and then do not actually give more, and it is also easy to conclude that the ends justify the means in ways that would apply to other sketchy businesses too).

The IQOS and next-generation products

Philip Morris has pushed hard into "next-generation products" like IQOS, a heated tobacco device that delivers nicotine without combustion. The company's marketing positions this as a "harm reduction" product compared to traditional cigarettes.

Is this better? Probably marginally less harmful than smoking, though not harmless. IQOS still delivers nicotine, still causes addiction, still causes some of the same diseases, just at lower rates than cigarettes. The public health community is mixed on whether to treat it as a harm reduction tool or as a gateway device.

BRI funds have not changed their screens in response to IQOS. A tobacco company is still a tobacco company. The new product does not redeem the business model. Philip Morris is still excluded regardless of what percentage of revenue comes from IQOS versus traditional cigarettes.

What about tobacco-free nicotine products

Some companies sell nicotine products that use synthetic nicotine or nicotine extracted from non-tobacco sources. Zyn, owned by Philip Morris, is the most successful of these. Is a nicotine pouch without tobacco still a "tobacco screen" violation?

Most BRI funds treat the entire nicotine delivery industry as part of the same category as tobacco. The underlying product is still an addictive substance with health consequences, and the same business model applies. PM is excluded regardless of the Zyn growth story.

The financial picture

Both PM and MO have done well in recent years. MO trades around 57 to 65 dollars in early 2026 with a dividend yield around 7 percent. PM trades around 120 to 140 dollars with a dividend yield around 4 percent and has benefited from IQOS growth.

For income investors outside the BRI space, both are frequently recommended as core yield holdings. Dividend aristocrat lists include MO. Retirement income portfolios that do not screen for values often have meaningful tobacco positions.

BRI funds give up this yield and have been doing so for years. The opportunity cost is real. A fair BRI fund prospectus should probably acknowledge that screening out tobacco has a measurable cost in income generation. Most do not disclose it in quite those terms, but it is worth knowing.

The takeaway

If you are building a BRI portfolio in 2026, PM and MO are exclusions. No drama, no debate, no complicated analysis. The screen is clean and the biblical logic is clear.

If you are trying to convince yourself to own them anyway because the yield is tempting, I would recommend going back to 1 Corinthians 6:19-20 and Matthew 16:26 and sitting with those verses for a while. The yield is real. The compounding is real. And the ongoing, measurable harm to millions of people is also real. Which of those do you want your dividends to be built on?

BRI funds have answered that question. You have to answer it for yourself. The honest answer is rarely "I can own this without thinking about it." That might be the most important thing about the whole exercise. It makes you think about it.