In the coronavirus crisis, tobacco dividends are “amongst the safest in the market”, analysts at Deutsche Bank believe.
Company after company across numerous sectors have dumped or delaying their dividend payments in recent weeks because of what the analysts call the “current economic reality” of coronavirus.
Furthermore, the number crunchers observed that coming weeks may see political, ethical or even investor pressure “for companies not to increase their dividends”.
In this current environment, the analysts see dividends from the likes of British American Tobacco PLC (LON:BATS) and Imperial Brands PLC (LON:IMB) as amongst the safest, though DB already cut its dividend forecasts for Imperial earlier in the week.
This week there also was some leftfield news from BAT, with the Lucky Strike maker saying it has begun development on a potential vaccine for coronavirus using its fast-growing tobacco plant technology.
Its biotech subsidiary, Kentucky BioProcessing, is developing a vaccine using tobacco plants and was currently in pre-clinical testing and could potentially manufacture between 1mln-3mln doses of the vaccine per week from June
Shares in both were pretty much flat on Friday, with BAT at 2,943.5p down 9% in the year to date, while at 1,569p Imperial's are down 16% so far in 2020.