British American Tobacco p.l.c (BATS) is a leading tobacco business based in the UK. British American Tobacco is listed on the London Stock Exchange (LSE) and employs 56,689 staff. All prices are listed in pence sterling.
|52-week range||2190.2476p - 3241.5662p|
|50-day moving average||2787.2354p|
|200-day moving average||2694.0986p|
|Wall St. target price||3825.26p|
|Dividend yield||2.1p (7.68%)|
|Earnings per share (TTM)||276.9p|
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Valuing British American Tobacco stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of British American Tobacco's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
British American Tobacco's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 10x. In other words, British American Tobacco shares trade at around 10x recent earnings.
That's relatively low compared to, say, the trailing 12-month P/E ratio for the FTSE 250 at the end of September 2019 (19.71). The low P/E ratio could mean that investors are pessimistic about the outlook for the shares or simply that they're under-valued.
However, British American Tobacco's P/E ratio is best considered in relation to those of others within the tobacco industry or those of similar companies.
British American Tobacco's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 1.9807. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into British American Tobacco's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.
However, it's sensible to consider British American Tobacco's PEG ratio in relation to those of similar companies.
British American Tobacco's EBITDA (earnings before interest, taxes, depreciation and amortisation) is a whopping £12 billion.
The EBITDA is a measure of a British American Tobacco's overall financial performance and is widely used to measure a its profitability.
To put British American Tobacco's EBITDA into context you can compare it against that of similar companies.
|Revenue TTM||£26 billion|
|Operating margin TTM||43.01%|
|Gross profit TTM||£21.4 billion|
|Return on assets TTM||4.64%|
|Return on equity TTM||9.62%|
|Market capitalisation||£62.8 billion|
TTM: trailing 12 months
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like British American Tobacco.
When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.
Total ESG risk: 29.29
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and British American Tobacco's overall score of 29.29 (as at 01/01/2019) is nothing to write home about – landing it in it in the 52nd percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like British American Tobacco is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
To gain some more context, you can compare British American Tobacco's total ESG risk score against those of similar companies.
Environmental score: 6.69/100
British American Tobacco's environmental score of 6.69 puts it squarely in the 6th percentile of companies rated in the same sector. This could suggest that British American Tobacco is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.
Social score: 18.04/100
British American Tobacco's social score of 18.04 puts it squarely in the 6th percentile of companies rated in the same sector. This could suggest that British American Tobacco is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.
Governance score: 12.05/100
British American Tobacco's governance score puts it squarely in the 6th percentile of companies rated in the same sector. That could suggest that British American Tobacco is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.
Controversy score: 3/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. A high-profile company, British American Tobacco scored a 3 out of 5 for controversy – a middle-of-the-table result reflecting that British American Tobacco hasn't always managed to keep its nose clean.
Wondering how that compares? Below are the controversy scores of similar companies.
|Total ESG score||29.29|
|Total ESG percentile||51.65|
|Environmental score percentile||6|
|Social score percentile||6|
|Governance score percentile||6|
|Level of controversy||3|
Dividend payout ratio: 7678.83% of net profits
Recently British American Tobacco has paid out, on average, around 7678.83% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 7.68% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), British American Tobacco shareholders could enjoy a 7.68% return on their shares, in the form of dividend payments. In British American Tobacco's case, that would currently equate to about 2.1p per share.
British American Tobacco's payout ratio would broadly be considered high, and as such this stock could appeal to those looking to generate an income. Bear in mind however that companies should normally also look to re-invest a decent amount of net profits to ensure future growth.
The latest dividend was paid out to all shareholders who bought their shares by 17 December 2020 (the "ex-dividend date").
British American Tobacco's dividend payout ratio is perhaps best considered in relation to those of similar companies.
Over the last 12 months, British American Tobacco's shares have ranged in value from as little as 2190.2476p up to 3241.5662p. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (LSE average) beta is 1, while British American Tobacco's is 0.5909. This would suggest that British American Tobacco's shares are less volatile than average (for this exchange).
To put British American Tobacco's beta into context you can compare it against those of similar companies.
British American Tobacco p.l.c. provides cigarettes and other tobacco products worldwide. It manufactures vapour and tobacco heating products; oral tobacco and nicotine products, such as snus, tobacco-free nicotine pouches, and moist snuff; cigars; and e-cigarettes. The company offers its products under the Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans, Newport, Camel, Natural American Spirit, Vogue, Viceroy, Kool, Peter Stuyvesant, Craven A, Benson and Hedges, 555, Peter Stuyvesant, Double Happiness, Granit, Mocca, and Kodiak brands. The company sells its products to retail outlets. British American Tobacco p.l.c. was founded in 1902 and is headquartered in London, the United Kingdom.
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