JTI

FY 09 EPS (Sen) 38.0 PER 12.1(x) Div Yield 4.8(%) ROE 21.2 (%)

EPS GR: last 5 years 7%, last 10 years -0.6%
Historical PE range: last 5 years 11.0 to 13.1, last 10 years 13.1 to 17.0
Historical DY range: last 5 years 8.2% to 6.8%, last 10 years 7.6% to 5.9%


JTI is in a defensive industry. Come rain or shine, its earnings will not be much affected. However, it is in an industry that is regulated negatively by the government. The government is curbing this industry, through various measures. It is anticipated that the growth of this industry will be challenging in the future years. Every year, one will have to worry each time the budget is announced. An unknown is the degree of confidence you have in your personal assessment of how fast JTI can grow its earningsg in this tightly regulated industry.


At the present price, based on historical comparative valuation, it is not exactly a bargain. Therefore, I would probably give this a miss and look elsewhere for undervalued stocks.

(I am only offering my personal view. You should make your own decision always.)