Imperial Tobacco Group PLC (LON:IMT), on the other hand, offers a higher yield at a lower earnings multiple, but comes with the risk that there may be a long-term decline in sales in some of its more mature western European markets.
Which share should I buy?
Imperial Tobacco Group PLC (LON:IMT)‘s greater exposure to developed markets, where smoking is in decline and the tax and regulatory regime is more hostile, looks like a growing risk to me.
I think that investors seeking a long-term, inflation-beating income are likely to be better served by investing in British American Tobacco. This firm’s dividend yield remains above the market average, and further growth looks very likely.
The best FTSE 100 dividends?
British American Tobacco PLC (ADR) (NYSEAMEX:BTI) and Imperial Tobacco Group PLC (LON:IMT) are both tempting income buys, but there are a number of other attractive, high-yielding alternatives elsewhere in the FTSE 100 you may also want to consider.
The article Should I Buy British American Tobacco or Imperial Tobacco Group? originally appeared on Fool.com and is written by Roland Head.
Roland Head does not own shares of Imperial Tobacco Group or British American Tobacco. The Motley Fool has no position in any of the stocks mentioned.
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