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Following the acquisition of Reynolds, American, British American Tobacco (BTI) is neck-and-neck with Philip Morris International to be the largest listed Global tobacco company--slightly larger than PMI on net revenue, but slightly smaller on total tobacco volume.

British American's Global Drive Brands are Dunhill, Kent, Pall Mall, Lucky Strike, and Rothmans, and it also owns Newport and Camel in the U.S.

The firm also sells vapor e-cigarettes, primarily its Vuse brand, heated tobacco, with Glo, as well Velo modern oral tobacco products. The company holds 29% of ITC Limited, the leading Indian cigarette-maker.

British American Tobacco, or (BTI) as American depositary shares are symbolized, was founded in 1902 and is headquartered in London, United Kingdom

Three key data points gauge British American Tobacco or any dividend-paying firm.

Those key three are:

(1) Price

(2) Dividends

(3) Returns

The three basic keys best tell whether any company has made, is making, and will make money.

BTI Price

Over the past year, British American share price fell  31.3% from $42.42 to $29.13 as of Friday’s market close.

If BTI  shares trade in the range of $28.00 to $42.00 this next year, its recent $29.13 share price might rise to $35.00 by next year. Of course, British American’s price could drop about the same $5.87 estimated amount, or more.

My annual upside estimate of $5.87 however, is $11.18 below the median of one-year price targets from 4 analysts tracking British American.

BTI Dividend

British American has paid variable Semi-annual dividends since January 15, 1999 and switched to variable quarterly payouts in 2019. BTI’s most recent declared Quarterly dividend, of $0.70 will be paid February 6th to shareholders on record as of December 21st.  The forward looking $2.80 annual dividend yields 9.61% at Today’s $29.13 share price,

BTI Returns

To put it all together, add the  annual dividend of  $2.80 to the price upside of $5.87 to find a $8.67 gross gain.

At Friday’s $29.13 share price, a little under $1000 would buy 34 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.29 per share.

Subtracting that likely $0.29 brokerage cost from the $8.67 estimated gross gain per share produces a net gain of $8.38 X 34 shares = $284.92 for a 28.5% estimated net gain.

You might choose to pounce on British American Tobacco PLC. BTI is a one-hundred twenty-one year old English tobacco company noted to be neck-and-neck with the largest listed Global tobacco company in the world. Furthermore, the estimated $96.10 of annual dividend income from $1k invested is about 3.3 times greater than today’s British American Tobacco PLC single share price.

The exact track of British American Tobacco’s ongoing future prices and dividends are yet to be known.

Remember the true value of any stock is best realized through personal ownership of shares.

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