British American Tobacco is looking quite attractive
The stock has been hit by various issues including regulatory concerns in the US adding uncertainty to the earnings growth in the sector. The stock is down almost 60% from its all time high. Sounds like a fair de-rating in the stock. Lets consider it further...
The free cash flow is at 30% with a dividend yield of around 8% as shown below the chart. The debt to revenue ratio is at 1.71 which is a substantial reduction from 2.51 which is where it was at its all time high in 2017.
So the stock is down almost 60% from its all time high in 2017 and it's has a healthy free cash flow, attractive dividend yield and a reducing debt to revenue ratio. That sounds like an attractive entry point into a fairly healthy looking company, all else equal.
From a fundamental growth perspective, the next generation of tobacco products, including heat not burn products may give an attractive future revenue stream which apparently has high margins to it.
Again sounds attractive.
Please note, this idea is shared for educational and discussion purposes only and should not result in speculative investment decisions in any asset class.
The free cash flow is at 30% with a dividend yield of around 8% as shown below the chart. The debt to revenue ratio is at 1.71 which is a substantial reduction from 2.51 which is where it was at its all time high in 2017.
So the stock is down almost 60% from its all time high in 2017 and it's has a healthy free cash flow, attractive dividend yield and a reducing debt to revenue ratio. That sounds like an attractive entry point into a fairly healthy looking company, all else equal.
From a fundamental growth perspective, the next generation of tobacco products, including heat not burn products may give an attractive future revenue stream which apparently has high margins to it.
Again sounds attractive.
Please note, this idea is shared for educational and discussion purposes only and should not result in speculative investment decisions in any asset class.