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This FTSE 100 stock yields 15%. I’d buy it in a Stocks and Shares ISA today

A quick glance at the Imperial Brands Group (LSE: IMB) share price suggests that tobacco stocks are no longer a defensive investment. It has fallen by a third in the stock market crash, as FTSE 100 blue chips get hammered across the board. However, many will see this as an opportunity to buy it at a bargain price, inside a Stocks and Shares ISA.

The Imperial Brand share price comes with an eye-popping yield of 15.37%. That’s the second biggest on the FTSE 100, behind Russian steel producer Evraz, which yields almost 25%. Numbers like these show you just how startling the stock market crash has been.

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The big problem with outsize dividends these days is that you cannot rely on them. A a string of companies have already slashed theirs in an unprecedented cull.

Stock market crash bargain

The Imperial Brands share price was under pressure even before Covid-19 struck. The FTSE 100 stalwart took a pummelling on 5 February, when it forecast flat revenues and lower adjusted earnings per share. This they attributed to the US regulatory ban on certain flavours of cartridge-based vapour devices and weaker than expected consumer demand for vapour.

Imperial Brands was on a long-term downwards trend well before the stock market crash. It has fallen 65% in the last three years alone. Smoking doesn’t just kill, it can also die off under pressure from tax-hungry governments, aggressive regulators, and consumer health campaigns. We have witnessed this in the West, and may one day see it in emerging markets.

On the other hand, tobacco manufacturers retain a massive customer base. Imperial Brands sells more than 250 billion ‘sticks’ a year. Its US business remain strong, while its Africa, Asia, and Australasia division has just delivered revenue growth, with strong volumes. It will be a long time before we live in a smoker-free world.

Imperial Brands share price opportunity

The current health crisis may persuade some to quit, as health experts warn smokers are more vulnerable and should stop smoking. I think the impact will be marginal, though.

Analysts at Citi offer some encouragement about the Imperial Brands yield, claiming on Tuesday that 2020 payouts from the world’s largest tobacco companies were safe. The report praised the companies’ resilience and added that if sales do slow, they can always cut back spending on next-generation products or credit lines.

Citi included Imperial Brands in this, saying it should continue to pay interest bills and maturing debts, while still funding this year’s shareholder payouts. One for this year’s Stocks and Shares ISA?

Stocks and Shares ISA buy

The Imperial Brands share price looks an incredible FTSE 100 bargain, trading at just five times forward earnings. I reckon those earnings are more secure than in many other sectors today. Even at today’s dizzying level, the dividend is covered 1.3 times.

Nobody knows what is going to happen next. That dividend could go, but the shareholder payouts at other companies seem in greater peril at the moment. While buyers are taking a risk putting this into their Stocks and Shares ISA, the potential rewards are also huge.

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Harvey Jones has no position in any of the shares mentioned. 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.