#6 - British American Tobacco (NYSE:BTI)
British American Tobacco (NYSE: BTI) - Under the category of systematic risk, we have the case of British American Tobacco. The FDA continues to rattle investors with threats that they will make good on their threats to ban menthol cigarettes – a move that would hurt BTI more than most because it is Reynolds American unit is the owner of Newport, the leading menthol brand. However the question is has the fallout already been priced into the stock. The stock has dropped over 50% in recent months, which does not make sense for, aside from the proposed ban, operates in what is considered a defensive sector. Consumers tend to indulge their vices regardless of market conditions. As evidence of this, tobacco and liquor stocks have historically been the top two sectors in terms of market returns over the past 80 years. This would make the drop in the company's stock seem a little overdone. And even if the ban is implemented, the company only reports 25% of its profits as coming from menthol products, making it likely that they could weather the storm just fine. The bottom line is this stock offers a great dividend yield of just under 7% and has a P/E ratio of just 9x earnings.
About British American Tobacco
British American Tobacco p.l.c. engages in the provision of tobacco and nicotine products to consumers worldwide. It also offers vapour, heated, and modern oral nicotine products; combustible cigarettes; and traditional oral products, such as snus and moist snuff. The company offers its products under the Vuse, glo, Velo, Grizzly, Kodiak, Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans, Camel, Natural American Spirit, Newport, Vogue, Viceroy, Kool, Peter Stuyvesant, Craven A, State Express 555 and Shuang Xi brands.
Read More - Current Price
- $36.83
- Consensus Rating
- Buy
- Ratings Breakdown
- 1 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
