Financial Performance & Guidance - The company's H1 performance was in line with expectations, and it is confident in H2 acceleration to deliver FY24 guidance of low-single digit revenue and APFO growth[9, 114] - Group revenue decreased by 0.8% organically to £12.944 billion in HY24[45, 60] - Adjusted organic diluted EPS increased by 1.3%[60, 156] - The company is targeting 3-5% organic revenue growth and mid-single figure organic adjusted profit from operations growth in the mid-term[162] New Categories - Smokeless product consumers increased by 1.4 million to 26.4 million[7] - Smokeless products represent 17.9% of Group revenue, up 1.4 percentage points[7] - New Category revenue increased by 7.4% to £1.709 billion[60, 94] - New Category contribution increased by £165 million, with contribution margin up by 10 percentage points vs HY23[14, 56] Regional Performance - In the U.S., organic revenue decreased by 6.7%, and APFO decreased by 5.1%[92] - Combustibles revenue in the U.S decreased by 8.5% adjusted for inventory movements[130] - Revenue in AME (Africa and Middle East) increased by 5.4%, and APFO increased by 5.3%[140] - Revenue in APMEA (Asia Pacific, Middle East, and Africa) increased by 1.8%, and APFO increased by 3.8%[149] Shareholder Returns - The company initiated a sustainable share buy-back program: £700 million in 2024 and £900 million in 2025[7]

Group 1 - Tobacco companies have been solid dividend plays for many years despite concentrated anti-smoking movements globally, as there remains a significant consumer base for tobacco products [1] - The tobacco industry continues to be profitable due to high-margin sales, even though overall sales growth is limited [2] - British American Tobacco (BAT) has a long history and a portfolio of well-known brands, including Camel, Lucky Strike, and Newport, along with a vape product, Vuse [5] Group 2 - BAT's annual revenue has been relatively stagnant this decade, with a notable 8% year-over-year increase in 2022, while its free cash flow (FCF) has consistently increased, reaching over 8.7 billion British pounds ($11.3 billion) in 2023 [6] - BAT's dividend payouts exceeded 5 billion pounds ($6.5 billion) in 2023, supported by its strong cash flow [6] - To achieve $1,000 in annual dividends from BAT, an investment of just under $10,884 is required, based on the current stock price of $32.20 per share and a quarterly dividend of $0.74 per share [7]

Core Viewpoint - British American Tobacco p.l.c. (BTI) continues to present a compelling investment opportunity due to its strong financial performance, particularly in the New Category segment, which has achieved positive margins for the first time [2][8] Group 1: Financial Performance and Stock Returns - BTI's stock has delivered a return of +10.1% and total returns of +12.8% (including dividends) since April 2024, outperforming the wider market's +7.7% [2] - The company reported robust FY2023 financial metrics, with a significant increase in Free Cash Flow and a healthier balance sheet [2] - BTI's forward P/E valuation stands at 6.91x, significantly lower than peers like Philip Morris (PM) at 16.61x, indicating potential undervaluation [6] Group 2: Market Position and Competition - BTI's Vuse maintains a leading market share of 41.1% in the e-cigarette segment, although it has seen a slight decline due to competition from illicit products [3] - The US government has initiated a task force to combat illegal e-cigarette sales, which may improve Vuse's sales in H2'24 [3] - Competition is expected to increase with Philip Morris' IQOS gaining market share globally and Altria's recent FDA approvals for menthol-flavored products [4] Group 3: Growth Opportunities in Oral Tobacco - BTI's Velo has experienced impressive growth, with volumes sold increasing by +34.4% YoY and revenues by +38.9% YoY in FY2023 [9] - The oral tobacco segment is projected to grow significantly, with market analysts expecting a CAGR of +30% through 2030, providing a growth driver for BTI [9] - BTI aims for £5B in New Category revenue by 2025, building on a £398 million increase to Group profit in FY2023 [6] Group 4: Shareholder Returns and Future Outlook - BTI offers a forward dividend yield of 9.22%, significantly higher than its peers, enhancing its attractiveness as a dividend stock [13] - The company has announced a £700M share repurchase program for 2024 and £900M for 2025, reflecting strong shareholder return strategies [13] - The stock is projected to appreciate by +35% to a long-term price target of $44.10, reinforcing the investment thesis [13]

With most stocks trading at premium valuations, investors can get a safe and simple return from this dividend giant. The market has soared since the beginning of 2023. The S&P 500 index has posted a total return level of 48% over that time frame, pushing the index's price-to-earnings (P/E) ratio of nearly 29. This is much higher than the long-term market average, with many popular stocks such as Apple, Nvidia, and Microsoft trading at even higher multiples. High earnings ratios likely mean high risks for st ...

分组1: British American Tobacco (BTI) - British American Tobacco has taken a significant writedown on the value of its cigarette brands, but growth in its alternative nicotine products is ahead of schedule, indicating a successful long-term business model evolution [3] - BTI shares are currently trading over 50% below their 2017 peak, selling for less than seven times forward earnings and offering an attractive 11.5% dividend yield [6] - The company is aggressively transitioning away from traditional cigarettes, investing heavily in alternatives such as vaping and heated not-burned delivery systems [15] 分组2: Kraft Heinz (KHC) - Kraft Heinz has faced challenges since its merger in 2015, struggling with revenue growth and a significant debt load, leading to dividend cuts and cost reductions [8] - Despite negative sentiment, KHC may be undervalued, with a current stock price of $32 compared to a fair value estimate of $57 per share [10] - The company could be well-positioned for a recession, as consumers tend to trade down to budget-friendly grocery products [19] 分组3: Molson Coors (TAP) - Molson Coors has seen its stock decline by 25% over the past year, but the beer market remains resilient during economic downturns [21] - The stock is currently trading for less than 10 times forward earnings, while Morningstar estimates a fair value of $70 per share [12] - Economic challenges may lead consumers to shift from premium products to more affordable options offered by Molson Coors [22]

Core Viewpoint - British American Tobacco (BAT) is currently seen as a potential investment opportunity despite its past stock performance, primarily due to its share repurchase strategy and attractive dividend yield [4][9][11]. Share Repurchase Strategy - BAT has repurchased 150,000 shares at an average price of approximately $32, which is part of a broader plan to reduce the share count using proceeds from the sale of its stake in Indian conglomerate ITC [1][6]. - The company plans to continue repurchasing shares through the end of 2025, indicating management's confidence in the stock's future performance [6]. Financial Performance and Valuation - The stock has fallen nearly 50% over the past decade, contrasting sharply with the S&P 500, which has more than doubled during the same period [9]. - BAT's forward P/E ratio is currently between 6 and 7, suggesting that the stock is reasonably valued given its expected earnings growth of 4% annually [11]. - The company sold 555 billion "sticks" in 2023, down from 756 billion in 2017, reflecting a long-term decline in smoking rates [10]. Dividend Yield - BAT offers a high dividend yield of 9.6%, supported by dependable cash flows and a dividend payout ratio of about 50%, which instills confidence in the sustainability of its dividends [8]. Market Outlook - Analysts suggest that investors looking beyond BAT's historical performance may find an excellent opportunity, with potential total returns estimated at 13% to 14% annually [11][16]. - The stock could transition from being a laggard to outperforming the market, driven by its strategic initiatives and improved valuation metrics [12][16].

Source: Kristi Blokhin / Shutterstock.com Altria's forward price-to-earnings ratio of 8.97x might seem average. However, reinvigorated growth paired with its forward dividend yield of 8.61% speaks volumes. The stocks of iconic brands are en masse. However, the informational asymmetry linked to the financial markets means that few are undervalued. Methodologically, my screening process emphasized fundamental attributes, valuation multiples, technical analysis, and event-driven aspects. Moreover, I ensured th ...

British American Tobacco has a huge yield, but it also has a huge problem. Investors should probably temper their expectations. Could that high yield present an opportunity for investors who want to achieve millionaire status by retirement? From a big-picture point of view, British American Tobacco is trying to milk a cash cow business so that it can build up newer businesses to replace it. Along the way, it is pumping out cash to investors via dividends, too, so they stick around. This is a difficult balan ...

The current interest rate environment has imposed a downward pressure on asset valuations across the board. This is a quite mathematical consequence, where higher risk-free rate increases the discount rate, which, in turn, decreases the result that stems from discounted future cash flows. This dynamic has strongly played out for duration heavy asset classes such as fixed income, real estate and equities that exhibit relatively fixed income streams (e.g., that are backed by long contracts that limit a meanin ...

Group 1 - British American Tobacco PLC (BTI) is showing a bullish signal with the approach of a Golden Cross, indicating strong upward momentum in the stock price [1][15] - The current stock price of BTI is $32.13, which is significantly above its 5, 20, and 50-day exponential moving averages (EMAs), suggesting a robust bullish trend [2][13] - The company has initiated a share buyback program, purchasing 200,000 ordinary shares from UBS AG, which reflects management's confidence and reduces the total shares in circulation to 2,221,832,242 [9][10] Group 2 - The technical indicators, including the 50-day simple moving average (SMA) at $30.45 crossing above the 200-day SMA at $30.48, further confirm the bullish trajectory of BTI [12][13] - Additional technical metrics such as the Moving Average Convergence Divergence (MACD) at 0.33 and the Relative Strength Index (RSI) at 66.74 support a bullish outlook, despite the RSI indicating the stock is nearing overbought territory [13] - The Bollinger Bands also suggest bullishness, with the stock trading in the upper band, reinforcing the positive sentiment around BTI [13]