Impressive Weekly Dividend Yield: 7.3%

Impressive Weekly Dividend Yield: 7.3%

Roll the dice with Imperial Brands: A lucrative dividend play in the tobacco sector

Tossing around the idea of high-yield dividend stocks? Imperial Brands, a tobacco veteran since 1901, could be your ticket to riches. Here's the lowdown:

Business as Usual

Imperial Brands boasts a diverse brand portfolio, including household names like Davidoff, Gauloises Blondes, West, and JPS. And let's not forget their substantial stake in Habanos, the Cuban cigar powerhouse [1].

The Nitty-Gritty

Stocks are all about numbers, and these numbers don't lie. Here's a breakdown:

Performance

Now, past performance doesn't guarantee future results, but it gives us a glimpse into the company's management prowess. Over the past five years, investors have seen a 31% loss without dividends [1]. That means no points here for the stock.

Continuity & Dividend Growth

Things are looking up when it comes to dividends. Imperial Brands boasts an impressive dividend yield of roughly 7.3% [1]. And even though payouts have had to take a hit during tough times, like the corona crisis, the company has underlying commitment to investors. So, two points for the stock.

Float Free

Shareholders often overlook free float, but it can be a game-changer. When more than half of shares aren't floating, the risk of takeovers and squeeze-outs increases. But not with Imperial Brands—its free float sits comfortably at 60% [1]. One point for the stock here.

Valuation

Tobacco might be the industry the stock market likes to write off, but Imperial Brands defies that narrative. With a P/E ratio of 6.5, the multiples are low and ready for business [1]. Will nicotine, and by extension, Imperial Brands, still be a thing in the future? Only time will tell.

News Situation

Currently, the news is looking pretty good for Imperial Brands. According to studies and reports released in 2021, young people have been smoking more during lockdowns [1]. One more point for the stock.

The Future

So, what's the verdict? Will future generations keep chasing the nicotine dragon? In emerging markets and with smoke-free products, demand seems to remain robust, giving Imperial Brands at least a favorable medium-term outlook [1]. Let's give one more point for the stock.

The Bottom Line

Imperial Brands scores a total of 6 out of 10 points. It's a bet on the prolonged dependence of individuals on nicotine. While risk-tolerant investors can grab a substantial dividend yield here, they should be prepared for the fact that this may not last indefinitely [1].

By the way: Keep an eye on these stocks. They've got low P/Es and generous dividends [2].

The Small Print

Do you think the CEO and majority shareholder of Börsenmedien AG, Mr. Bernd Förtsch, sounds familiar? That's because he has invested in the stocks under discussion, lining his pockets with potential gains [4]. Keep that in mind.

[1] This analysis focuses on the London-listed shares (IMB.L), and points reflect that. Reports using other listings may yield different results.

[2] In addition to Imperial Brands, there are other stocks with low P/Es and high dividends worth checking out.

[3] Here are some details about Imperial Brands' dividend yield and financial health, which wasn't incorporated into the original analysis. Note that the dividend yield differs depending on the listing. For instance, the yield for the London-listed shares (IMB.L) is around 6.52%, but it stands at 2.43% for other listings.

[4] It's worth noting that the CEO and majority shareholder of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has invested in the financial instruments under discussion. His potential benefits stemming from these investments must be considered.

1. Despite the potential risks associated with tobacco stocks, Imperial Brands, a company with a rich history dating back to 1901, presents an intriguing opportunity for dividend investors as it offers an impressive yield of approximately 7.3%.
2. Regardless of the industry's perception, Imperial Brands defies the norm with a low P/E ratio of 6.5, indicating undervalued stocks in the market.
3. Offering a diverse brand portfolio including Davidoff, Gauloises Blondes, West, JPS, and a substantial stake in Habanos, Imperial Brands remains a key player in the tobacco sector.
4. In the midst of investor concerns about the impact of lockdowns on personal-finance-related trends, studies indicate that young people have been smoking more, creating a potentially favorable environment for Imperial Brands.
5. High-yield dividend stocks enthusiasts considering Imperial Brands should be mindful of the company's reliance on nicotine and be prepared for change in the future, as their investment represents a bet on the prolonged dependence on the substance.

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