. FTSE 100‘S Imperial brands (LSE: IMB) remains one of my key passive income resources.

Passive income is money with minimal effort, as in the case of spare dividends. In 2024, the shares paid 153.42PA, which gives 5.3% compared to the current price of 28.76 £.

Analysts forecast that dividends will augment to 164 pence in 2025, 171.4p in 2026 and 176.2p in 2027. This gives appropriate yields based on the current share price of 5.7%, 6%and 6.1% .

How much can you do?

11,000 pounds is the average savings amount in Great Britain that would buy 382 shares in Imperial brands.

Thus, investors considering such a holding this year will bring 583 pounds of dividends based on 5.3% profitability.

Over 10 years on the same basis – ignoring the forecast increases in return – it would augment to $ 5830. And after 30 years with the same average performance will augment to $ 17,490.

This is much more than it would be made of a standard savings account in Great Britain.

Recharging phrases by connection

Although these phrases are good, they can be much larger using the standard “dividend” investment technique.

This is similar to leaving interest in a savings account to gradually grow over time. However, the effects of doing it with spare dividends can be unusual.

In the case of the Imperial brand, the exploit of this method at the same average capacity of 5.3% would generate 7666 pounds of dividends after 10 years, not £ 5830.

After 30 years, on the same basis, it will augment to 42,753 £, not $ 17,490.

By adding an initial investment worth 11,000 GBP, the holding would be worth 53 753 GBP. From the same profitability 5.3% pay 2849 pounds a year of passive income!

Potential bonus of stock prices

When I bought Imperial Brands, they brought much more than now. This is due to the fact that the yield of action moves in opposite directions to its price. And these shares increased by 73% compared to the trading of March 5, 12-month low-level level 16.62 £.

I think that a lot depends on the ongoing purchases of shares that tend to support price profits. The company also published solid results over the past year.

Its 2024 showed an augment in the reported operating profit by 4.5% year-on-year-to 3.55 billion GBP. The profit for the action jumped by 19.1% to 300.7 pence.

Having said that, actions can still have a lot of value despite such an augment in price.

To find out if this is true for the Imperial brand, I conducted an analysis of discounting cash flows. Using future cash flows forecasts of other analysts and my own, it shows that the shares are underestimated in the amount of $ 28.76.

Therefore, its fair value is technically 71.90 GBP, although the unpredictability of the market can lower it or higher.

Will I buy more shares?

The risk for action is narrow competition in the tobacco and nicotine exchange sector, which can squeeze margins.

Nevertheless, the company expects that net revenues augment in net revenues in 2025.

In addition, the withdrawal of the planned ban on the American Food and Drug Administration on menthol cigarettes is positive. These products constitute about 15% of the US brand profits in the USA.

Considering their solid financial forecasts, sturdy profitability and extreme underestimation, I will soon buy more shares.