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Opinions Darren Sissons
British American TobaccoBTITOP PICKOct 05, 2023
Darren SissonsOwned
$30.44
Stock price when the opinion was issued
$58.97
As of Jun 18, 2026. Market Open.
tobacco
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Premium contentTOP 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)
tobacco
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.
Darren SissonsOwned
tobacco
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.
Darren SissonsOwned
tobacco
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.
Darren SissonsOwned
tobacco
Premium contentPAST 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.
tobacco
Premium contentPAST TOP PICK
Premium contentTOP 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)
tobacco
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)