The market's recent volatility highlights the irrationality of short-term movements, making high-yield dividend aristocrats attractive for stable, long-term returns. High-yield aristocrats offer an average yield of 5.3%, significantly higher than the S&P and other high-yield ETFs. They also have solid growth prospects. These top 10 aristocrats are undervalued by 18%, providing a 29% upside potential within 12 months and 11.9% CAGR long-term returns.
The market appears expensive, but focusing on stocks with stable growth and a reasonable valuation, like British American Tobacco, should mitigate risks. BTI's diverse product portfolio, including combustibles, oral products, heated tobacco, and vapes, positions it well despite the decline in traditional smoking. BTI aims to become a fully smokeless company by 2035, leveraging growth in non-combustible nicotine products to sustain financial performance.
British American Tobacco offers an 8% dividend yield with a conservative 60% payout ratio, ensuring stable and growing dividends for investors. Despite a 12% stock price decline over five years, BAT's dividends have provided inflation-beating returns, making it a reliable income investment. BAT's strategic debt reduction and share buybacks enhance shareholder value, contributing to expected EPS growth of 6-7% annually.
High-yield dividend stocks present an intriguing paradox for investors. While historical data shows they can outperform the S&P 500 over multidecade periods when dividends are reinvested, many high-yielding stocks struggle to match market returns over the short term.
If you like high-yield investments you've probably had both British American Tobacco (BTI 1.14%) and Kraft Heinz (KHC 1.04%) pop up on your stock screens. There are things to like about each one, things to dislike, and one major difference that should lead investors to a clear choice between them.
I aim to create a $500,000 portfolio for passive income, focusing on high-yield and growth companies to outpace inflation. My portfolio includes 10 companies: 70% stable high-yielders like Pepsi, BTI, and Realty Income; 30% high-growth stocks like Novo Nordisk and Visa. Consumer staples dominate my picks, leveraging trends in eating habits and vices; risks include regulatory changes and shifts in consumer behavior.
Most dividend investors seek solid passive income streams from quality dividend stocks.
Despite persistent regulatory uncertainty and declining cigarette usage worldwide, the tobacco industry is alive and well in 2025. People are smoking less, but many have shifted their consumption toward emerging products like oral nicotine pouches and electronic devices.
British American Tobacco p.l.c.'s latest dividend declaration shows a slight sequential decline and modest annual growth of around 1.6% only. With this payout, the stock currently yields 8.1% on an FWD basis, a level above its historical average. However, BTI stock's high yield is not as attractive as on the surface due to limited growth and when benchmarked against risk-free rates.
British American Tobacco (BTI -0.33%) is a consumer staples stock, but it is probably one of the riskiest consumer staples stocks you can buy. That's highlighted by its dividend yield, which at around 8.2% is more than three times larger than the yield of the average consumer staples stock.
British American Tobacco's Vuse brand drives growth in alternative products, appealing to younger users and revitalizing the company's portfolio. Shares offer an attractive 8% dividend yield, making BTI a compelling investment for income-focused investors. BTI is undervalued with a forward P/E ratio of 8X, offering a higher earnings yield compared to Altria and Philip Morris.
The Fed's decision to cut rates only twice in 2025 has led to negative sentiment among investors, emphasizing the need for resilient dividend-issuing companies. British American Tobacco offers an 8% dividend yield and stable income, making it a strong option for passive income amid market fluctuations. BTI's focus on New Categories, like smokeless products, aims to offset declining cigarette revenues, though regulatory risks and financial challenges remain.