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Philip Morris International Inc (PM)
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Restaurant Brands International Inc. (QSR)
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British American Tobacco p.l.c. (BTI)
We have EPD and GIC's in our income side of RRSP's. We have room for a another stock at a 1/2 position. What are your thoughts on BTI with an 8.52% dividend? Do you have another stock as a preference?
Thank you
D&J
BTI is one of the largest tobacco companies globally, and now trading at a cheap valuation of 7.2x times' Forward P/E (at the lower end of historical averages ranging from 7.0x – 9.5x). Revenue growth in the last five years has been good, averaging around 7%. The balance sheet is so-so, with net debt of GBP(pound) 39.1B. Total debt is around 3.8x times trailing twelve-month cash flow of GBP 10.4B, and cash flow grew nicely around 7% compared to GBP 9.7B last year. The company has been growing quite consistently over the years; BTI also started repurchasing shares recently indicating management believes shares are undervalued. We like the name, we think BTI is a high-quality consumer staple with strong pricing power, trading at a cheap valuation. It is hard to get a 'secure' 8%+ dividend these days. We also like other dividend names such as PM and QSR. We know QSR best and like it.