Daily Stock Opinions and Ratings

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Jim Cramer - Mad MoneyBritish American TobaccoBTIDON'T BUYNov 08, 2021

Pass. Doesn't care for tobacco stocks (or vape companies) given the harm they produce to human health.

Jim Cramer - Mad Money

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$34.48

Stock price when the opinion was issued

$58.97

As of Jun 18, 2026. Market Open.

tobacco

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HOLD

Not a "loved" company from a ESG perspective. Question is whether 10% divided yield is sustainable (thinks that it is). Debt levels ok. Believes company will perform well over the long term. Good for dividend oriented investors (good bond proxy). Owns shares and will continue to hold.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK

Stockchase Research Editor: Michael O'Reilly

If you can get around buying into big tobacco, this is a dividend aristocrat. It pays an excellent dividend, backed by a payout ratio under 50% of cash flow. The company is developing innovative products to increase demand. Cash reserves are growing, it trades at 7x earnings and under book value. We recommend setting a stop-loss at $27, looking to achieve $42.50 -- upside potential of 34%. Yield 7.1%

(Analysts’ price target is $42.78)

PARTIAL BUY

Share price has under performed the past 10 years. 9% yield very attractive. Good for foreign income investors. Does not invest in sector due to growth prospects.

WEAK BUY

Tobacco has done well in the past. These companies boast high free cash flow and dividends. Their sector has been consolidating. You can own this for the yield. He doesn't look at tobacco companies, because of the environment we're in. At current levels, it's not bad to own.

TOP PICK

A clear mean-reversion trade. Historically, it traded between 4.4-6.8. With its 9% yield, you only have to wait 8 years, and then every dollar earned is playing with the house's money. In a recession, income is a scarce commodity. Probably a buyback next year. Transitioning to consumables. You may not like its product, but it's good downside protection. Yield is 9.14%.

(Analysts’ price target is $44.94)

WEAK BUY

Big dividend payer and big free cashflow. Declining used of tobacco in the developed world, less so elsewhere. Hard to get excited about it, but he acknowledges the big dividend if you want it. Yield is almost 9%.

PAST TOP PICK

(A Top Pick May 20/22, Down 12%)

Good debt levels. Pays an 8% dividend yield, so over 5 years you will collect 40%. If you've owned this for 10-15 years, you've done very well.

COMMENT

It is well managed but most investors don't want to hold a 'sin' stock.

BUY

Last year they started buying back shares. It has some growth and is considered defensive. Attractive PE, but faces a compression from its historically high 8% dividend. Clients have objected to tobacco stocks.

TOP PICK

Many investors unwillingly to buy tobacco companies - presenting opportunity. Slow growing dividend very attractive. Balance sheet has recently been cleaned up. Recently announced 2.5% share buyback.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK

(A Top Pick Jan 11/22, Down 0.6%)Stockchase Research Editor: Michael O’Reilly Our PAST TOP PICK with BTI has triggered its stop at $40. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 1%, when combined with our previous buy recommendation.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK

(A Top Pick Jan 11/22, Up 12.7%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with BTI is progressing well. We now recommend trailing up the stop (from $32) to $40.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK

Stockchase Research Editor: Michael O'Reilly If you are looking for a strong dividend and don't mind owning a sin-based company, then we reiterate BTI as a TOP PICK. The England based manufacturer of well known tobacco brands worldwide trades at a 11x PE and just 1.1x book value. Its growth in earnings (coming from growing users during the pandemic and a business model growing non-combustible product lines) makes it good value here. The company pays a stellar dividend, backed by a payout ratio of under 65% of cash flow and has been using cash reserves to pay down debt. We continue to recommend a $32 stop-loss, looking to achieve a target of $50 -- 24% upside. Yield 7.59% (Analysts’ price target is $49.56)

COMMENT

Pays very high dividends. Low growth. Great cashflow, as people are addicted. He has no exposure to the sector. Some investors will avoid these "sin" stocks.

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