04-02-2022, 12:50 PM
Thanks Jalanlong. Yeah, again, I totally agree that it would be silly to assume that big tobacco will be in good shape in 30 years, but I'm delighted to have them shower me in cash for the next five or ten. Yes, I'll keep a much closer eye on these than, say, my JNJ or KO, but JNJ and KO aren't going to have nearly the positive impact on my portfolio that tobacco will in the next five years.
Which brings me full circle to my original post. A high dividend yield is not at all the same thing as a yield trap. Sure, you should be wary of an unusually high dividend. But in BTI's case, the huge divided (though slightly less huge than when this thread started) is amply covered by current revenue. And BTI's earnings (per share, at least) ARE growing; 2021 was its highest EPS since at least 2014. To shun that fire hose of cash that is right in front of you, now, because at some point in the future the tobacco party surely must end (which people have been saying for decades now, by the way) doesn't make sense to me. But hey, that's why it is a market!
Which brings me full circle to my original post. A high dividend yield is not at all the same thing as a yield trap. Sure, you should be wary of an unusually high dividend. But in BTI's case, the huge divided (though slightly less huge than when this thread started) is amply covered by current revenue. And BTI's earnings (per share, at least) ARE growing; 2021 was its highest EPS since at least 2014. To shun that fire hose of cash that is right in front of you, now, because at some point in the future the tobacco party surely must end (which people have been saying for decades now, by the way) doesn't make sense to me. But hey, that's why it is a market!