Our analysis is based on comparing British American Tobacco plc with the following peers – Altria Group, Inc., Philip Morris International Inc., Imperial Brands PLC Sponsored ADR and Vector Group Ltd. (MO-US, PM-US, IMBBY-US and VGR-US).
Dividend Quality Overview
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 2 were high quality, 2 were medium quality and 1 was low quality.
- The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.
Quadrant label definitions. Hover to know more
Over the last twelve months (prior to June 30, 2017), BTI-US paid a high quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 1.56x), investing cash flow (coverage of -0.26x), issuance cash flow (coverage of -0.39x) and twelve-month prior cash (coverage of 0.89x), for a total dividend coverage of 1.82x.
BTI-US’s issuance cash flow includes outflows from net debt repayment (coverage of -0.10x) and net share buybacks (coverage of -0.07x). Thus, the total coverage including share buybacks is 1.89x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||8.27||8.07||8.89||8.21||7.48||4.24|
|Dividend Payout (%)||66.84||66.88||87.06||64.57||62.61||68.93|
A complete list of metrics and analysis is available on the company page.
British American Tobacco plc engages in the manufacture and distribution of tobacco products. Through its subsidiaries, it operates through the following geographical segments: Asia-Pacific, Americas, Western Europe, and EEMEA. Its products include cigarettes, smokeless snus, cigars, and pipe tobacco under the Kent, Dunhill, Lucky Strike, and Pall Mall brands. The company was founded by James Buchanan Duke on September 29, 1902 and is headquartered in London, the United Kingdom.
The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website www.analytixinsight.com.