Tobacco giant Imperial Brands: Attraction for income-focused investors?
**Cigarettes Ain't Going Nowhere: Imperial Brands' $980 Billion Opportunity****
Hold on to your lighter, folks! The cigarette market is far from extinguished. In fact, the global market is forecasted to skyrocket from $755 billion in 2024 to an impressive $980 billion by 2032, according to a study by HTF Market Intelligence. That's a solid annual growth rate of 3.3% - don't sneeze or you'll miss it!
While some regions might be phasing out traditional smoke, the global market is lighting up again, and it's all good news for Imperial Brands. Remember them? They're one of the heavy-hitters in the tobacco biz.
Many of their competitors, like Philip Morris and BAT, are focusing on the next big thing - e-cigarettes and heat-not-burn products. But not Imperial Brands! They're sticking with what they know and doing it well - their core brands and markets. And it's paying off.
But here's the twist - the growth ain't happening in Europe or the US. Nope, the tobacco giants are eyeing Africa, Asia, and parts of South America. As populations grow and incomes rise, so does consumption. Imperial Brands has a front-row seat to this action, and they're positioned to catch a disproportionate share of the growth.
On top of that, Imperial Brands' balance sheet looks healthier than its major competitors. For dividend hunters, the stock is a reliable performer, with a total payout of 1.64 British pounds predicted for the current year, yielding a dividend of over 5.8% - one of the highest in the FTSE 100.
The management is all about stability and smart decision-making. The payout ratio is decent, and earnings per share are expected to reach 2.79 British pounds by 2025, resulting in a payout ratio of 58.6%. Lastly, the valuation is appealing, with a current P/E ratio of just 7.
So, if you're an investor who's not put off by the western smoking ban trend, Imperial Brands might be worth a closer look. They're a solid value and dividend play with plenty of growth potential - especially in those hot, up-and-coming markets like Africa, Asia, and South America.
Disclaimer: Boersenmedien AG, the publisher, has a potential stake in Imperial Brands. The management and majority shareholder, Mr. Bernd Foertsch, may benefit from the stock's performance.
[1] "Global Nicotine Market Forecast to 2026 by Product, Type, Distribution Channel, Tobacco Type, Trends and Growth Opportunities." HTF Market Intelligence. Accessed April 2, 2023.[2] "World Tobacco Market 2017-2027." Euromonitor International. Accessed April 2, 2023.[3] "Heated Tobacco Products Market Size, Share, Growth, Trends & Forecast 2019 – 2027." Adroit Market Research. Accessed April 2, 2023.[4] "Philip Morris Retailing International Announces the Launch of I QOS 3 Multi in the Markets of Philippines and Taiwan." Philip Morris International. Accessed April 2, 2023.
- Amid the shift in the tobacco industry towards electronic cigarettes and heat-not-burn products, Imperial Brands sets itself apart by focusing on their core brands and markets, offering an intriguing opportunity for business-oriented investors who are also keen on personal-finance strategies, given the company's impressive dividend yield and growth potential, particularly in emerging markets like Africa, Asia, and South America.
- After noting the impressive growth forecast for the global cigarette market and Imperial Brands' strategic positioning, interested investors may find it worthwhile to explore further the company's financial landscape for investing purposes, recognizing that the company is a leading player in the industry and the management team demonstrates a focus on financial stability and smart decision-making that benefits both the company and its investors, particularly in the realm of personal-finance and investing.
