What are you smoking?
Posted: September 5th, 2018, 9:38 am
Tobacco shares seem to remain out of favour, but not so much that the yields are a flashing danger signal. On that basis I am considering either a top up or new addition in this sector. The candidates I am looking at are:
Imperial Brands (IMB)
Mkt Cap £26bn
Yield 6.3%
Growth Rate 5yrs 10.0%
Cover 1.6
PE 10.2
British American Tobacco (BATS)
Mkt Cap £85bn
Yield 5.3%
Growth Rate 5yrs 6.5%
Cover 1.5
PE 13.1
Philip Morris (PM)
Mkt Cap $121bn
Yield 5.9%
Growth Rate 3yrs 3.1%
Cover 1.1
PE 18.9
Altria Group (MO)
Mkt Cap $110bn
Yield 5.5%
Growth Rate 3yrs 8.3%
Cover 1.3
PE 10.6
I already hold IMB, so this would be a top up, any of the others would be new additions. Looking at the numbers above IMB seems the best choice, the down sides being although comfortably FTSE100, it is small against the competition and any of the others would give company diversification within the sector. The purchase would be in my SIPP so no US withholding tax to muddy the water.
Thoughts on whether I should just stick to IMB or look to add a new share much appreciated.
Terry.
Imperial Brands (IMB)
Mkt Cap £26bn
Yield 6.3%
Growth Rate 5yrs 10.0%
Cover 1.6
PE 10.2
British American Tobacco (BATS)
Mkt Cap £85bn
Yield 5.3%
Growth Rate 5yrs 6.5%
Cover 1.5
PE 13.1
Philip Morris (PM)
Mkt Cap $121bn
Yield 5.9%
Growth Rate 3yrs 3.1%
Cover 1.1
PE 18.9
Altria Group (MO)
Mkt Cap $110bn
Yield 5.5%
Growth Rate 3yrs 8.3%
Cover 1.3
PE 10.6
I already hold IMB, so this would be a top up, any of the others would be new additions. Looking at the numbers above IMB seems the best choice, the down sides being although comfortably FTSE100, it is small against the competition and any of the others would give company diversification within the sector. The purchase would be in my SIPP so no US withholding tax to muddy the water.
Thoughts on whether I should just stick to IMB or look to add a new share much appreciated.
Terry.