Japan Tobacco: Russia Exit In The Price But 6% Dividend Yield Not Attractive Enough.
$JAPAN TOBACCO INC(JAPAF.US$ $Advanced Micro Devices(AMD.US$ We believe Japan Tobacco's exit from the Russian market will be a neutral event for the shares.
The longer-term outlook for earnings is flat to falling, but this may be enough to deliver a sustainable dividend yield of 6%.
This prospective yield is not attractive enough given the negative secular trends for combustible tobacco. We rate the shares as neutral.
The longer-term outlook for earnings is flat to falling, but this may be enough to deliver a sustainable dividend yield of 6%.
This prospective yield is not attractive enough given the negative secular trends for combustible tobacco. We rate the shares as neutral.
We expect Japan Tobacco to exit the Russian market. This will have a materially negative impact on earnings, but we believe is priced into the shares. With a neutral outlook on earnings growth longer term, we believe a dividend yield of approximately 6% is sustainable, but we do not view this as being attractive enough given the negative secular trends for combustible tobacco and rate the shares as neutral.
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