Why British American Tobacco smoulders, for now
Despite depending on a product that carries health warnings, BAT appears to be a safe investment for a while yet
Can British American Tobacco (BAT) still be weighed up as a long-term habit? The share arguably offers smouldering value at current levels, which are about 15% down from the R942 high in November last year. By traditional investor metrics BAT appears to offer robust value; it’s on a trailing earnings multiple of about six and offers a yield from dividends (which are now conveniently paid every quarter). Regulatory challenges, health issues and increasingly vehement social resistance to smoking perhaps justify BAT’s modest stock-market rating. This may work for investors wanting a three-to five-year fix — especially in prevailing market volatility. At the recent investor presentation for interim results to end-June, BAT CEO Nicandro Durante was soothingly optimistic about medium-term prospects. He predicted another "good" financial year of adjusted earnings growth at constant exchange rates. Durante noted the cigarettes and tobacco heated products (THP) portfolio had (again) outperfo...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.