Anyone topping up Imperial Brands?

[vrdiver]

BAT & Diageo also sliding a bit today.
Wonder if people really are sticking to new year's resolutions...........

Me and Mrs VRD are still on "dry January", but I'm not taking ALL the blame for Diageo's slump!

[kempiejon]

I have a friend who always does dry February, he also cuts out cake, takeaways, confectionery and coffee. He says not only are there so many sweet treats and booze left over from Christmas that January is impractical in his household but February is the shortest month so least painful abstinence.

[tjh290633]

Some people may choose to forswear certain delights during Lent, but that lasts 40 days (and nights).

Do tobacco and alcohol shares react in any way?

TJH

[idpickering]

I don't help much on both fronts, as I neither smoke, nor drink alcohol.

Ian.

[tjh290633]

I see that both BATS and DGE are down today, -1.30% for BATS and -1.15% for DGE. On the other hand, IMB were unchanged.

TJH

[westmoreland]

£26.80 now

IMB was the first and only stock i bought when i started investing in 2016 - i bought at £36.50 so down a fair bit, but i only bought a few thousand worth as i was learning. i did minimal research.

i wouldn't hold any hope of a JTI takeover - AFAIK they are restricted from taking on too much leverage by the government who are a significant shareholder so it was always highly unlikely - does anyone know anything about this?

people are getting excited about vaping and ecigs, but i'm not - these will be lower margin, require innovation, and be subject to competition from non tobacco majors.

key markets include australia and the EU, where the effects of plain packaging will only filter through in the coming decades to come - the early signs are there is little impact on consumption trends, but it doesnt take a genius to see that the brand equity will be adversely affected for new smokers. IMB do tend to operate at the value end of the spectrum so may be affected less.

the dividend is currently costing £1500m and is forecast to go to £1650m next. it's a fine balancing act ensuring the dividend rises by 10%, debt is reduced to a manageable level, and ensuring there is sufficient capital to invest in NGP and efficiencies. they managed it this year, and tobacco generates excellent cash flow as we all know.

as long as the company manages to keep doing what i said in the paragraph above, then i'm happy to hold. as i said, i do not expect a JTI takeover.

[monabri]

At 2682p the yield is ~6.3% ( based on a Divi of 170.2p). Assuming an uplift of 10% on the Divi going forward the yield would be virtually 7%. The temptation is to come back next week as the share price keeps falling. At what point though will the market think " hey, this is a good buy?".



( Apologies if this post appears twice...I posted the first time but it doesn't seem to have registered)

[Bouleversee]

I've thought that several times, Mon, and been proved wrong every one.

[idpickering]

As I just posted elsewhere, I have decided to top up my Imperial Brands holdings next week. IMHO, they are grossly oversold. Glaxo nearly won the race, but I prefer the 10% dividend rises that IMB tend to offer thanks. A great buy (IMB) IMHO currently, as are GSK.

Ian.

[tjh290633]

IMB are top of my list for topping up at the moment, and have been for some time. As things stand it will be the end of the month before I have sufficient accumulated dividends to do it, but Segro are approaching the point for trimming back, just short of 1.5 times the median holding value. A 2% rise relative to the median would do it (or a fall in the median, currently BA.).

Should that happen, IMB and NG. would benefit and BT.A would take the dividends.

TJH

[Wizard]

At 2682p the yield is ~6.3% ( based on a Divi of 170.2p). Assuming an uplift of 10% on the Divi going forward the yield would be virtually 7%. The temptation is to come back next week as the share price keeps falling. At what point though will the market think " hey, this is a good buy?".

My bold.

Or when do people here start to see IMB in the 'danger zone' with a yield that is just too good to be true?

Terry.

[tjh290633]

Or when do people here start to see IMB in the 'danger zone' with a yield that is just too good to be true?

Terry.

See https://www.investegate.co.uk/imperial- ... 00037546V/

Our continued strong cash flow generation has enabled a further £0.8 billion of debt reduction at constant currency, and delivered another year of 10 per cent growth in our dividend, demonstrating our commitment to growing shareholder returns. This is our ninth consecutive year of double digit dividend growth. Our dividend pay-out ratio of 64 per cent remains one of the lowest among our tobacco peers.

Their adjusted earnings per share are 267p, and the dividend 170.7p. When that ratio falls towards or below parity, that would definitely be the time to be cautious.

TJH

[westmoreland]

Or when do people here start to see IMB in the 'danger zone' with a yield that is just too good to be true?

Terry.

See https://www.investegate.co.uk/imperial- ... 00037546V/

Our continued strong cash flow generation has enabled a further £0.8 billion of debt reduction at constant currency, and delivered another year of 10 per cent growth in our dividend, demonstrating our commitment to growing shareholder returns. This is our ninth consecutive year of double digit dividend growth. Our dividend pay-out ratio of 64 per cent remains one of the lowest among our tobacco peers.

Their adjusted earnings per share are 267p, and the dividend 170.7p. When that ratio falls towards or below parity, that would definitely be the time to be cautious.

TJH

there was a short discussion on dividend sustainability in a presentation given by oliver tant at the barclays consumer staples conference - worth a listen to all shareholders IMO.

[cshfool]

Funny enough I see Olly T (CFO) and Ally C (CEO) are listed as sellers in the last 5 months, though the company has been usefully purchasing their shares in recent buybacks (1.15m) ie from Sep 2017 at prices from £30 to £33, now £26.80.

As to the title question, not I. If Terry Smith doesn't want it anymore, a long term investor apparently , I don't think I do and I have sold earlier in the week, instead of the months ago that I should have.

csh

[Dod101]

If Terry Smith doesn't want it anymore, a long term investor apparently , I don't think I do and I have sold earlier in the week, instead of the months ago that I should have.

So are Terry Smith's requirement's the same as yours? If so good on you, but so often fund manager's goals are not the same as mine. I certainly would not make a move as you have on the basis of a fund manager's actions.

Everything we hear from Imperial is that the dividends will continue and not just continue but increase at 10% per annum. This is the HYP Board and it seems to me that this share is an ideal candidate for holding against the aims of the Board.

Dod

[idpickering]

Everything we hear from Imperial is that the dividends will continue and not just continue but increase at 10% per annum. This is the HYP Board and it seems to me that this share is an ideal candidate for holding against the aims of the Board.

Dod

I couldn't agree more Dod. There was a time in the past when my exposure to tobacco shares,( Imperial & Brit American), was at 10% in capital value of my HYP. Nowadays, that figure is 7.7%, which I'm more happy with.

Ian.

[kempiejon]

I couldn't agree more Dod. There was a time in the past when my exposure to tobacco shares,( Imperial & Brit American), was at 10% in capital value of my HYP. Nowadays, that figure is 7.7%, which I'm more happy with.

Ian.

Ian, I can't say I enjoy it when the market reduces my holdings by 20% or more. I had been worried that my BT holding was overweight and I see it's now a much more manageable proportion of my over all portfolio by having falling by over 35%.

[idpickering]

I couldn't agree more Dod. There was a time in the past when my exposure to tobacco shares,( Imperial & Brit American), was at 10% in capital value of my HYP. Nowadays, that figure is 7.7%, which I'm more happy with.

Ian.

Ian, I can't say I enjoy it when the market reduces my holdings by 20% or more. I had been worried that my BT holding was overweight and I see it's now a much more manageable proportion of my over all portfolio by having falling by over 35%.

Hi kempiejon, I should've been more explanatory regarding my quote above. That reduction from 10%, to 7.7% was due to me investing elsewhere in order to spread my risk more. I wasn't inferring that my exposure had been reduced by market/stock movements. But either way, I'm happier at the lower level.

Ian.

[monabri]

Now at £26.05. approx 6.6% yield.

[idpickering]

Now at £26.05. approx 6.6% yield.

I see that monabri, thanks. They're down 2.3% currently, heaven knows why? My scheduled purchase on this Thursday is still going through, along with top ups of Lloyds and Admiral Group.

Ian.