British American Tobacco (NYSE: BTI) outpaced the market last month by rising 16% compared to a 1.8% uptick in the S&P 500, according to data provided by S&P Global Market Intelligence.
The rally put shares in solidly positive territory so far this year, although the global tobacco giant remains lower by over 30% in the past 52 weeks.
Image source: Getty Images.
Investors were happy with the broader operating and financial metrics that the company revealed on the last trading day of February. That report showed that revenue rose 25%, or 3.5% after adjusting for recent acquisitions. Adjusted operating profit expanded at double that pace, in part because of success in marketing high-margin e-cigarettes. "[British American Tobacco] performed well in 2018," CEO Nicandro Durante told investors in a press release, "exceeding our target of high single-digit adjusted constant currency EPS growth."
Persistent declines in sales volumes for traditional cigarettes are pressuring the company's long-term earnings power. Investors are also worried about regulatory changes that might limit tobacco companies' ability to sell e-cigs. Investors have to weigh those risks against attractive aspects of owning this stock, including its over 6% annual dividend yield.
More From The Motley Fool
- 10 Best Stocks to Buy Today
- The $16,728 Social Security Bonus You Cannot Afford to Miss
- 20 of the Top Stocks to Buy (Including the Two Every Investor Should Own)
- What Is an ETF?
- 5 Recession-Proof Stocks
- How to Beat the Market