Friday, June 9, 2023

British American Tobacco (LSE: BATS or NYSE ADR : BTI ) - Attractive 8.6% dividend yield and trades at a low forward P/E of 7.5 but price lowest since 2020

British American Tobacco is one stock that I am vested in and it is down to the lowest level since 2020. However, it is showing some incredible positive financial numbers that put our lousy S-REITs to shame.

First of all , its fwd yield of 8.6% is greater than its fwd PE of 7.56

Market Cap $72.30B
EPS (FWD) $4.31
Div Rate (TTM) $2.68
Payout Ratio :62%
FCF yield of 15%+
Revenue Y/Y +7.7%
EBITDA Y/Y +1.7%
CFO Y/Y +7.0%
BTI's payout ratio is 62% today, the lowest payout ratio of the tobacco giants.
$BTI's debt to equity ratio has reduced from 81.1% to 56.3% over the past 5 years.
Debt is well covered by operating cash flow (24.4%).Interest payments on its debt are well covered by EBIT (7.4x coverage).


Profit Margin 24.10%
Operating Margin (ttm)42.17%

Management Effectiveness

Return on Assets (ttm)5.01%
Return on Equity (ttm)9.57%

Income Statement

Revenue (ttm)27.66B
Revenue Per Share (ttm)12.26
Quarterly Revenue Growth (yoy)9.50%
Gross Profit (ttm)22.85B
Book Value Per Share (mrq)33.80
Dividend data from seeking alpha:

British American has a BBB+ credit rating. Nothing in BTI's fundamentals justifies its 11% decline in the last month or 17% YTD decline. British American Tobacco is now the most attractive stock in the consumer staples space. The price is falling far more than future consensus expectations and is continually revealing more value.


Thursday, June 8, 2023

May2023 Finance update - Monthly Dividend/Interest received $6.9K

May2023 Dividend/Interest received from my investment account is about SGD $6.9k. This is slightly lower compare to May2022 due to a dividend stock that has its dividend slashed to almost zero.  Portfolio YTD gain including dividend has collapsed to 0.7% and this is much worst than April as all my three main portfolio in HKSE, S-Reit and LSE are crashing due to many dividend stocks going ex-date , US debt ceiling uncertainty and dismal China PMI report on the last day of  May.  

Trade in May.
I sold off First Pacific at a good gain but cut loss on DigitalCore DC reit. I have increased my LSE portfolio by adding idap.l etf  ,BATS and IMB. I have bought a new small stake in Swire Pacific B I have also subscribed 9.5k of KIT due to a right issue. 

Previously, I have been sitting a huge amount of cash in a retirement account from my previous job in the US. I have invested about 68 % in investment grade and US treasury bonds to lock up the higher interest rate and another 10% into various dividend ETF. The rest is put into short term money market fund which currently yield 4-5% . I am assuming that the FED interest rate hike will end soon and locking into higher long term yield will provide more secure passive income. With this new investment,  my cash holding will be dropping below 18% of my liquid net worth but it will provide an additional USD10K passive income in the next 12 months. In May2023, I have started receiving dividend income of USD $986 from my newly revamped retirement account.If this monthly dividend/interest from retirement account is added, my monthly passive income is around 8.2K in May.  I am looking forward to the second half of 2023 as the new dividend/interest from retirement start rolling in and increase my monthly passive income by 1k average.

2017 to 2023 Monthly Dividend/Interest earned from Investment Portfolio :

Dividends received in May2023 from Foreign Investment (Stocks): USD $2125

Interest received in May2023 from Foreign Investment (bonds): USD $425

Interest received in May2023 from banks interest/FD/others in US: USD $43

(Newly added) Dividend/Interest received in May2023 from retirement account: USD $986

Realized gain/loss in USD: $3309

Dividends received in May2023 from SGX: SGD $3323

Interest received in May2023 from banks interest/FD/others in Spore: SGD $205

SGX Realized gain/loss SGD: -2700

Total dividend and interest from my investment portfolio + bank/money market/retirement account + trading gain/loss generated in May2023 : SGD$9783

May2023 Dividend earned from investment account only: SGD $6639

Counters from my investment portfolio contributing to monthly Dividend/Interest in May2023 :

May2023 Liquid Net worth distribution:

May2023 Investment/Retirement Portfolio including SSB: