Philip Morris is currently considered overvalued at 23 times its earnings, which makes it less appealing than competitors like British American Tobacco. While PM is a leader in heated tobacco with its IQOS product, it is experiencing slower growth, increased competition, and possible tax hikes. Even though PM is doing well with smokefree products, the difference in valuation compared to British American Tobacco doesn't seem fair, even if we anticipate strong growth for PM in the future.
British American Tobacco (BTI 1.84%) is among the biggest cigarette manufacturers globally. This positions the company within the consumer staples sector, as smokers usually continue to purchase cigarettes regardless of the economic situation.
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British American Tobacco p.l.c. has released its Q4 and FY 2024 earnings report, showing that growth may be slow due to several challenges. However, the overall return for shareholders remains strong, making it a good option to keep. The current dividend yield for the stock is approximately 7.8%.
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British American Tobacco is my biggest stock investment that isn't in the usual income sectors like BDCs, REITs, and midstream companies. Following the complete report for 2024, BTI's value fell by about 10%. Consequently, the price-to-cash-flow ratio has also dropped to 6.6x, while the yield has increased to around 7.7%.
The emphasis is on alternatives to cigarettes, along with the stock price of BAT.
British American Tobacco's recent 10% decline could be a good chance to buy. Past data indicates that there is a 33% return over the next 12 months after similar drops. Even with some negative growth news, BTI's adjusted revenue increased by 1.3% in 2024, and the management is optimistic about achieving long-term growth targets of 3-5% in sales and 4-6% in earnings per share.
On Thursday, we put together a list of 10 companies with weak earnings and outlooks. In this article, we will examine how British American Tobacco p.l.c. (NYSE:BTI) compares to the other stocks. The stock market ended positively on Thursday, as investors reacted positively to new inflation figures and tariff news.