The Imperial Brands share price has fallen. Here’s why I’d still pick its 10% yield

first_img Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Christopher Ruane | Friday, 26th February, 2021 | More on: IMB Simply click below to discover how you can take advantage of this. In the past few weeks, the Imperial Brands (LSE:IMB) share price chart has headed down. It’s also down almost 20% over the past year. The share price has now got down to a point where its dividend yield is in the double digits. That is not common for a blue chip company. Obviously a lot of investors don’t feel confident about the company’s prospects.By contrast, I remain upbeat. I see the Imperial Brands share price as a buying opportunity for my own portfolio.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…A new strategy hit the Imperial Brands share priceLast month, the company unveiled a revised strategy. After a new chief executive took office last year, he reviewed the existing business. The new strategy reflects his findings.It’s not exactly an entirely new strategy, to be clear. In some ways, it is just a slight shift of focus. There isn’t a radical overhaul in prospect. Nonetheless, it seems to have been poorly received. Imperial isn’t the only tobacco company whose share price has struggled lately – rival British American Tobacco has also headed down. This likely reflects some negative sentiment on the sector. Tobacco is seen as a declining market, after all, and the rise in ESG investing could deter some investors from buying tobacco shares. Nonetheless, with the yield now at 10%, Imperial’s strategy hasn’t done what I hoped it would, or improved investor feeling about the Bristol company’s prospects.Personally, though, I think the new strategy makes sense. It focusses on shoring up cigarette sales in the company’s five biggest markets. While cigarette sales are declining in many markets, they remain the profit engine for Imperial. So making the most from them while it can makes sense to me. It may not be a long-term strategy, but it should help to support profitability in the short- to medium-term even in the face of declining consumer demand.The future of ImperialOne concern about tobacco companies in general, which certainly applies to Imperial, is whether they can survive in future.That has been a concern weighing on the Imperial Brands share price for years already. Yet Imperial has kept paying out dividends year after year. It did reduce the dividend last year, although I see that as positive in that it helps the company to pay down some of its substantial debt.Pricing power should help the company. For example, over five years Imperial expects cigarette volume to decline 2%–3% each year in Europe. But it expects to be able to increase prices 3%–4% each year, so the market value is set to remain the same or even increase slightly despite the volume contraction.The company’s renewed focus on cigarettes doesn’t mean that it is a one-trick pony with regards to format. It still expects cigarettes to be 80% of the market in 2025, so I appreciate its focus on them. Its approach on next generation products has so far focussed on vaping, with disappointing results. It is now shifting to focus on heated tobacco, which it reckons is more promising.I don’t see Imperial standing still. The Imperial Brands share price with a 10% yield is attractive to me. I added to my holding after the strategy day. The recent price fall looks like a buying opportunity to me. Are you on the lookout for UK growth stocks?If so, get this FREE no-strings report now.While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.And the performance of this company really is stunning.In 2019, it returned £150million to shareholders through buybacks and dividends.We believe its financial position is about as solid as anything we’ve seen.Since 2016, annual revenues increased 31%In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259Operating cash flow is up 47%. (Even its operating margins are rising every year!)Quite simply, we believe it’s a fantastic Foolish growth pick.What’s more, it deserves your attention today.So please don’t wait another moment. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Our 6 ‘Best Buys Now’ Shares christopherruane owns shares of Imperial Brands. The Motley Fool UK has recommended Imperial Brands. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.center_img The Imperial Brands share price has fallen. Here’s why I’d still pick its 10% yield Get the full details on this £5 stock now – while your report is free. FREE REPORT: Why this £5 stock could be set to surge Image source: Getty Images. Enter Your Email Address See all posts by Christopher Ruanelast_img read more