Steady high dividend yield recorded this week at 7.3%
Hunting High Dividends? Check Out Imperial Brands!
Delving into Imperial Brands
Established in 1901, Imperial Brands has been a dominant force in the tobacco sector for over a century. Its diverse portfolio includes iconic brands like Davidoff, Gauloises Blondes, West, JPS, and a substantial stake in Habanos - a renowned cigar distributor and producer in Cuba.
Getting the Numbers Right
While past performance isn't always predictive, it's crucial for shareholders. Over a five-year period, investors have seen a 31% decline in returns without dividends, earning the stock 0 out of 2 points.
Dividend Goldmine
With a projected dividend yield of 7.3%, Imperial Brands is a dividend hunter's dream. Despite reducing payouts during the pandemic, the company has a long history of delivering dividends. This combination earns it 2 out of 2 points.
Free Float Factor
A free float of 60% reduces the risks of takeovers and squeeze-outs, adding another point to Imperial Brands' score.
Valuing Imperial Brands
Despite languishing in a sector labeled as defunct by the stock market, Imperial Brands boasts a low P/E of 6.5. The future of tobacco remains debatable, but for now, the stock scores 1 out of 2 points.
Positive News Horizon
Recent studies indicate a resurgence in smoking among young people during lockdowns, contributing to a favorable news situation for the company. This earns another point for the stock.
Eyeing the Future
The fate of Imperial Brands hinges on the continued dependence of future generations on nicotine products. Despite growing concerns about health and rising competition from smoke-free products, the company remains optimistic about its prospects, particularly in emerging markets. This positions Imperial Brands positively in the short and medium term, earning it 1 out of 2 points.
Final Verdict
Imperial Brands scores 6 out of 10 points in this ranking. The stock is a gamble on humanity's persistent reliance on nicotine, offering a high dividend yield for risk-takers. However, it's essential to consider the industry's inherent risks and the company's strategic adaptability to future challenges.
Bonus Investments
If you're interested in other low-P/E stocks with high dividends, check out these options:
- Altria Group: A leading tobacco company known for brands like Marlboro, offering a dividend yield of around 8%[6].
- British American Tobacco: This multinational tobacco conglomerate offers a dividend yield of approximately 6%[7].
- Regardless of the debatable future of tobacco, Imperial Brands is a dividend goldmine, with a projected dividend yield of 7.3%.
- In 1901, Imperial Brands entered the tobacco sector and, over a century later, its portfolio includes the renowned cigar distributor and producer, Habanos.
- Despite the reduced payouts during the pandemic, Imperial Brands has a long history of delivering dividends, making it a dividend hunter's dream.
