Here is how Imperial Tobacco Group PLC (IMBBY) and WK Kellogg (KLG) have performed compared to their sector so far this year.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Imperial Brands PLC has outperformed the S&P 500 by 47.03% and is trading just 2.4% below its 52-week high of $36.25. Despite a slight revenue decline, IMBBY's gross profits increased by 4.5% YoY, driven by a robust distribution network and strong market presence. IMBBY's forward PE ratio of 13.32X and undervaluation by 28.70% make it an attractive buy, especially compared to BTI and PM.
Imperial Brands has delivered a 25% total since my last coverage six months ago, exceeding expectations, with shares up over 130% since 2020. Despite rising share prices and expanded multiples, Imperial Brands remains attractive due to its strong cash generation and ongoing share buybacks and dividends. However, current valuation at 9.27x earnings and a 5.8% dividend yield is less compelling compared to past years and peers like British American Tobacco.
IMBBY made it to the Zacks Rank #1 (Strong Buy) income stocks list on November 19, 2024.
Imperial Brands, Revolution Beauty and Mothercare will be among those to report from London on Tuesday, alongside Walmart across the Atlantic.
Here is how Imperial Tobacco Group PLC (IMBBY) and Premier Foods PLC. (PRRFY) have performed compared to their sector so far this year.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Imperial Brands offers a compelling dividend yield at around 6.3%, and has a history of double-digit total shareholder returns, making it attractive for income investors. The company has a history of fluctuating dividends but has stabilized its payout ratio to a sustainable 60-70%, reducing investor risk. Recent changes to the dividend structure promise more predictable and steadily growing payments, with a higher total payout expected in 2025.
Imperial Brands has outperformed peers with a 42% gain over the past year. But it's unlikely to stop here. The company's latest trading update reveals continued positive performance, particularly for its next generation and it plans to pay a much bigger dividend in FY25. Its market multiples also continue to look attractive compared to tobacco peers, even as they have risen over the past months.
Even though Imperial Brands' shares have risen by 90% in the last 4 years, shares are still trading at low valuations. Share buybacks should accelerate growth to 6-7% a year, making it a compelling long-term investment, at least for the medium term. The market has underestimated cash flows generated by Big Tobacco for decades, resulting in high dividends and low valuations for share buybacks.
Big Tobacco player Imperial Brands PLC (LSE:IMB)'s in-roads into the smoking-alternatives industry is gaining pace, although these next generation products (NGPs), as Imperial Brands calls them, remain a small fraction of the group's total sales. Referring to the diversity of vapes, heated tobacco products and oral nicotine pouches, NGPs are expected to show net revenue growth of between 20% and 30% in Imperial Brands' full-year results due in November.