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A Closer Look at Imperial Tobacco Group PLC (IMT)’s Dividend Potential

Imperial Tobacco Group PLC (LON:IMT) currently changes hands on a P/E rating of 11 for 2013, representing a chunky discount to its peers in both the tobacco and FTSE 100 sectors, while it also beats both groups in terms of projected dividends. I believe that the firm provides stellar value for money at current price levels given its plans to turbocharge future earnings.

Imperial Tobacco Group PLC (LON:IMT) is embarking on an ambitious restructuring program, closing scores of local brands and refocusing operations toward its more successful main labels, which have far superior pricing power, and plans to create 300 million pounds of cost savings per annum from October to September 2018. In my opinion, this — combined with rising turnover from developing regions — should help to deliver increasingly exciting earnings, and consequently dividend, growth moving forward.

Furthermore, I believe that Imperial Tobacco’s ongoing buyback policy sweetens the investment case for income seekers. Last year the tobacco specialists spent 528 million pounds on share repurchases and announced at 2012’s finals that it plans to keep its buyback program rolling, with approximately 500 million pounds’ worth of transactions targeted per year.

Zone in on other spectacular stocks
If you already hold shares in Imperial Tobacco Group, check out this newly updated special report that highlights a host of other FTSE winners identified by ace fund manager Neil Woodford.

Woodford — head of U.K. Equities at Invesco Perpetual — has more than 30 years’ experience in the industry and has identified two other fantastic cigarette manufacturers in the report set to deliver spectacular investor returns.

The article A Closer Look at Imperial Tobacco Group’s Dividend Potential originally appeared on

Royston Wild owns shares in Imperial Tobacco Group. The Motley Fool has no position in any of the stocks mentioned.

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