British American Tobacco: Why This 6% Yield Remains My Largest Holding

Philipp Brohl790 FollowersFollow5ShareSavePlay(15min)Comments(4)SummaryBritish American Tobacco remains a resilient, recession-resistant business, currently trading at a 20% discount to intrinsic value and yielding 6%.BAT's modern oral segment, led by Velo Plus, is accelerating rapidly, with U.S. sales up 297% and global market leadership in this high-margin NGP category.While heated tobacco and vaping segments face competitive and regulatory challenges, BAT's cash-generating combustibles continue to fund dividends, buybacks, and NGP investments.With a P/E of 11.69 and a 'buy' rating, BAT offers a margin of safety, though upside is more limited than during prior lows. Nestea06/iStock via Getty Images It has been a while since I last covered my largest holding by far, British American Tobacco (BTI), to which I'm going to refer as BAT going forward. For those who didn't follow my previousThis article was written byPhilipp Brohl790 FollowersFollowPhilipp is a seasoned value investor with nearly 20 years of experience in the field. He takes a global approach to investment opportunities, seeking out undervalued companies that offer a significant margin of safety, leading to attractive dividend yields and returns. While he does not limit his investments to specific sectors or countries, he focuses only on companies he thoroughly understands and can reasonably assess for future growth potential. Philipp is particularly enthusiastic when he identifies a company with a solid earnings track record trading at less than 8x free cash flow, which inspired his username: 8xfreecash.Analyst’s Disclosure: I/we have a beneficial long position in the shares of BRITISH AMERICAN TOBACCO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.