3 Reasons to Buy British American Tobacco Stock Like There's No Tomorrow

British American Tobacco (BTI) has long been a favorite among income-oriented investors, thanks to its high dividend yield and consistent payouts. However, the company's recent performance and future prospects make it an attractive investment opportunity for growth-focused investors as well. Here are three reasons to consider buying BTI stock like there's no tomorrow:

1. Strong Dividend Growth and Yield:
- BTI has a history of consistent dividend growth, with a 5-year dividend growth rate of 3.02% and a 10-year growth rate of 4.75%.
- The company's annual dividend has increased from $2.97 per share in 2022 to $3.00 per share in 2023, indicating a 1.02% increase.
- BTI's dividend yield is currently 8.28%, which is attractive for income-oriented investors.
-

2. Diversified Product Portfolio and Market Leadership:
- BTI offers a wide range of tobacco and nicotine products, including cigarettes, heated tobacco products, vapor products, and modern oral nicotine products.
- The company's New Categories (vapor and modern oral nicotine products) have shown strong revenue growth, with revenues up by 29% in the first half of 2023 compared to the same period in 2022.
- BTI's strong global brands, such as Pall Mall, Rothmans, Lucky Strike, Dunhill, Kent, and Viceroy, provide a stable revenue base and market leadership position.
-

3. Attractive Valuation and Growth Prospects:
- BTI's price-to-earnings (P/E) ratio is 16.59, which is relatively low compared to the industry average and may indicate that the stock is undervalued.
- The company's enterprise value (EV) to earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio is 12.17, which is also relatively low compared to the industry average.
- BTI's revenue has grown consistently over the past decade, with a compound annual growth rate (CAGR) of 5.91% from 2010 to 2023.
- The company's adjusted profit from operations has grown consistently, with a CAGR of 3.9% from 2010 to 2023.
-

In conclusion, BTI's strong dividend growth, diversified product portfolio, market leadership, attractive valuation, and consistent revenue and profit growth make it an appealing investment opportunity for both income-oriented and growth-focused investors. As the tobacco industry continues to evolve, BTI's commitment to innovation and adaptability positions it well for long-term success. However, investors should also be aware of the risks and challenges facing the company, such as macroeconomic pressures, regulatory uncertainty, and geopolitical risks, and consider diversifying their portfolios accordingly.