$IMBBY I don’t own any shares in Altria but I still monitor its quarterly performance from time to time to benchmark against my other investments such as BAT, PM, IMB. Altria recently announced its Q1 2024 results and an article on Tobacco Insider
> Hence IMB’s success in the U.S. cigarette market is not solely attributable to the downtrading trend, but rather it has executed the right strategy as a challenger.
Stefan Bomhard has repeatedly said Imperial needed a “challenger” mindset in order to compete with its larger rivals.
when everyone else turns away from combustibles then there is room for a tobacco company that focused on old school unpopular cigarettes. This room is taken by IMB (More sales people, better marketing, combustibles focus). Great strategy for the best margin product out their.
Also by far! the best capital allocation from all of them. Highest buybacks lowest debt. Such a great management.
PM took on debt to pay dividend last year, just check it. BAT + IMB are the only cigarette stocks I would by right now.
Yes, IMB made a good decision to cut dividend, delever and then increase share buyback amount. Share buyback alone can contribute to 7% EPS growth per annum in sterling term. Imagine how much PM needs to accomplish in order to deliver 7% EPS growth in USD, let alone the execution risk. There’s no margin of error really.
By the way, PM increased debt last year mainly to acquire commercialisation right of IQOS in the US from Altria which cost USD2.7bn (majority of the payment made in 2023). Other than that, PM’s free cash flow is more than enough to cover dividend payment.
It would be awesome to see more buybacks for Bats.
I also see no big downside. Valuations cant drop further. Already PE = 6. valuations rock bottom. Imagine further 25-50% price drop. Dividend yield 12-15%?? :D never ever.
Valuation wise the investemt safe. The only question is can i grow pr have constant revenue and cash flow. Imb and bat should grow mid single digit so this part of the investment is also safe.
Name me one better industry for this valuations right now at all time high markets.
Vector Group is another company which focuses only on combustibles. Unfortunately their capital allocation strategy is less clear (pay down debt, increase dividend, buy back shares, or - God forbid - buy more real estate?). They’re reporting on Thursday. We’ll also learn if they got their costs under control.
Yes I know them. But I like IMB and BAT more. Still you got phantasie that new RRP are working and they are diversified in a lot of countries.
I would buy PM but not for that valuation compared to Bat.
UVV you can check but I dont like.
I like karelia a lot but its a very small greek tobacco firm with bad cap allocation but great business too.
I will max invest 50% of my portfolio in tobacco and then reinvest the dividend until Bat and Imb will go back to historic valuation. PE 10 Div 5% would be fair I think for single digit growing business. High moats and great margins. Until then i will just let the snowball run for its self. Every dividend will be reinvested in Bat and ImB. Also great they are form UK so no additional dividend Tax for foreign investors for me from germany.
Where else can you get such high dividend yield for this kind of safety.
> Hence IMB’s success in the U.S. cigarette market is not solely attributable to the downtrading trend, but rather it has executed the right strategy as a challenger.
Stefan Bomhard has repeatedly said Imperial needed a “challenger” mindset in order to compete with its larger rivals.
when everyone else turns away from combustibles then there is room for a tobacco company that focused on old school unpopular cigarettes. This room is taken by IMB (More sales people, better marketing, combustibles focus). Great strategy for the best margin product out their.
Also by far! the best capital allocation from all of them. Highest buybacks lowest debt. Such a great management.
PM took on debt to pay dividend last year, just check it. BAT + IMB are the only cigarette stocks I would by right now.
Yes, IMB made a good decision to cut dividend, delever and then increase share buyback amount. Share buyback alone can contribute to 7% EPS growth per annum in sterling term. Imagine how much PM needs to accomplish in order to deliver 7% EPS growth in USD, let alone the execution risk. There’s no margin of error really.
By the way, PM increased debt last year mainly to acquire commercialisation right of IQOS in the US from Altria which cost USD2.7bn (majority of the payment made in 2023). Other than that, PM’s free cash flow is more than enough to cover dividend payment.
Great.
It would be awesome to see more buybacks for Bats.
I also see no big downside. Valuations cant drop further. Already PE = 6. valuations rock bottom. Imagine further 25-50% price drop. Dividend yield 12-15%?? :D never ever.
Valuation wise the investemt safe. The only question is can i grow pr have constant revenue and cash flow. Imb and bat should grow mid single digit so this part of the investment is also safe.
Name me one better industry for this valuations right now at all time high markets.
Vector Group is another company which focuses only on combustibles. Unfortunately their capital allocation strategy is less clear (pay down debt, increase dividend, buy back shares, or - God forbid - buy more real estate?). They’re reporting on Thursday. We’ll also learn if they got their costs under control.
Yes I know them. But I like IMB and BAT more. Still you got phantasie that new RRP are working and they are diversified in a lot of countries.
I would buy PM but not for that valuation compared to Bat.
UVV you can check but I dont like.
I like karelia a lot but its a very small greek tobacco firm with bad cap allocation but great business too.
I will max invest 50% of my portfolio in tobacco and then reinvest the dividend until Bat and Imb will go back to historic valuation. PE 10 Div 5% would be fair I think for single digit growing business. High moats and great margins. Until then i will just let the snowball run for its self. Every dividend will be reinvested in Bat and ImB. Also great they are form UK so no additional dividend Tax for foreign investors for me from germany.
Where else can you get such high dividend yield for this kind of safety.
IMB > BAT > PM > MO