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British American Tobacco: 25 Hated Dividend Growth Stocks Compared


  • British American Tobacco is currently "hated" by the market for a variety of reasons.
  • We share data on 25 top dividend-growth stocks that are also currently hated by the market (considering they trade near the lower end of their 52-week price ranges).
  • After reviewing the details on BTI (including business, valuation, big-dividend yield and risks), we conclude with our strong opinion on investing in BTI specifically and dividend growth stocks in general.
  • This idea was discussed in more depth with members of my private investing community, Big Dividends PLUS. Learn More »

Stock Market Crash and Escape - Global Business Strategy Exchange

British American Tobacco - 25 Hated Dividend Growth Stocks, Compared

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Following the incredible fiscal and monetary stimulus during the pandemic, the market is now reeling from high inflation and the threat of an ugly recession. However, one thing that helps many

We also own shares of British American Tobacco (~1% position) in our 27-stock High Income NOW Portfolio (which currently offers an aggregate 10.0% dividend yield). You can access the complete portfolio, plus a steady flow of new investment idea reports, through our "Big Dividends PLUS" service (we're currently offering 32% Off* all new subscriptions as part of our introductory Flash Sale).

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This article was written by

Blue Harbinger profile picture

Blue Harbinger is a team of analysts helping individuals achieve their investment goals by focusing on portfolio building and diversification to hedge risk.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of BTI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (163)

Who do you have to bribe to get included in the mobile app?

“This page is currently available on our desktop site only.”

SA is cheating both customers and analysts by not offering everything on mobile app.


Ulrich Eckert profile picture
I have a few Mo shares (very small bet), but much more BTI (my Big Tobacco Exposure).

Altria lost 9% of smokeable volume in 2022 (adjusted).
BTI lost 5 % .

Inflation has been big in the European Union and other parts of the world too.

Explanation is simple: Smoking Cigarettes in other parts of the world is still more popular and accepted. Americans are shocked how pupular smoking in Germany, France, Italy etc. is.
As i see it. 20% of Americans (Age 21 - 30) vape.
So if you add cigarettes and other smoking categories ( non smokeable, cigars, pipes etc.).
Nicotine and so on don t go away so fast. That s still a big category.

The problem for Altria is that they are late in the Vape and Heating Tobacco game. The decline rates for cigarettes in the US are now big, because people have an alternative. This is a new situation than 10 years ago!

The problem is the Marlboro Cowboy seems not to loose against Lucky Strike or Camel but to a new category.
My conclusion is: BTI has a much longer runway with traditional cigarettes, because decline rates globaly are nothing like in the US.

+BTI owns two of the biggest Brands in Nicotine Pouches, Vapes and Heated Tobacco worldwide. These new categories that steel the Marlboro cowboy his customers.
@Ulrich Eckert I think both companies are great. Both will still live in 10 years ;-)
Knife Catch’n profile picture
The rumors of BTI’s demise have been greatly exaggerated.

BTI finally starting to show some strength - new products growing more quickly than forecasted.

Alan Brochstein, CFA profile picture
I exited this morning. I am very negative on stocks right now. I also covered some of my "short" (SQQQ), raising cash. I haven't yet bought anything, but I am finding investors are probably too pessimistic on retail stocks. I guess, though, that this isn't a new story!
Mister Doom profile picture
After seeing the list..now I hate my portfolio. Thanks a lot.
Elk Tart profile picture
Nice article. I'm long BTI but not "big long." What are its earnings prospects? Stable, at least? The only value investor test that BTI fails (all the other tests are "green") is that (net assets + PPE) is less than total liabilities, where we want it to be positive. That's interesting, because the debt:equity ratio is pretty good at 0.5. I view BTI like I view the pipeline stocks: Someday they may be gone, but for now they are reliable cash generators.
Blue Harbinger profile picture
@Elk Tart I like it.
I am long BTI too, but not "big long" either.
Worthwhile article.I own it and will buy more based on your article. Thank You.
Not a fan of smoking, but it's a lot more civilized than it used to be. In the old days, it was impossible to go to any public venue and not come home reeking of cigarette smoke. Shower, shampoo and wash your clothes. Different now. People are in fact free to choose what they do. Users of intoxicants do far more damage than nicotine users. Nicotine users, as workers, are not, in my experience, mostly useless, unproductive slackers. Nor is there evidence that smoking damages children in the womb. A claim that intoxicants cannot make. The rabid opposition to cigarettes has blocked research on the benefits that could be derived from nicotine, a cancel culture effect.
Inhaling burning gases isn't good for people. But nicotine is remarkable in that it can be invigorating or relaxing depending on how it is smoked. It should be researched for its properties that could be utilized to carry medicines, particularly in crossing the blood brain barrier. IMHO.
Meanwhile, those who want to invest in tobacco are free to do so.
Duncan20903 profile picture
I just can't get past the thought that killing your customers isn't a best business practice.

This century we've seen smoking prevalence fall from 35% to 11%. Good luck investing in this space....you'll need it.

Duncan20903 profile picture
@Overfished Recommended Retail Price?
Rent Relief Program?
Recurrent Respiratory Papillomatosis?
Renovation Repair and Painting?
Really Really Pointless? OK I figured it out!
@Duncan20903 smoking has dropped but that figure should includes who switched from smoking to RRP
Excellent article really like your comparison chart long lots of those. JNJ is our biggest holding.

You got trade around stocks like BTI and MO, I reduced BTI over 40 bought back down here. Or sell calls. I prefer to sell part at the top of the range and buy near the bottom. Sold MO last over 50. PM I don’t trade since it’s in an uptrend. Long all currently 7% of the portfolio down from 10%.
Dividend Ambassador profile picture
BTI is about the fattest suspended pitch right over the plate l have seen in 20 years. It is like MSFT from 2010-2013 when MSFT stock routinely traded at PE 10. Maybe this absurd situation w BTI stock is even better???…. Anyway, I’ve been so greedy I almost feel embarrassed. It feels like the candy store was left fully stocked and unlocked…
Knife Catch’n profile picture
@killiondt BTI has recently ballooned to become my #1 holding. Hard to believe it’s taken people so long to see the profit potential here.
Dividend Ambassador profile picture
@Value Div it has ballooned to #1 for me as well.
Bilbozark profile picture
Where Juicy now? "I'm buying hand over fist just like billionaires, and and... Buffet..."
Pffart...I've been in and recently added to replace the half taken by call exercise. Just do your own work...
Ulrich Eckert profile picture
The prices of all tobacco stocks are down. But is that based on facts like earnings and cashflows?

In southern Europe smoking rates are much higher than in the US. There are markets like India, Indonesia with a lot of smokers. New reduced risk products often have even higher margins than the "old" product.

Stock prices of tobacco shares are down over the last 10 years, but profits are up.
What if nicotine stays a big worldwide market for another 20 years +. Buying tobacco shares now would be a brilliant move.
Dividend Ambassador profile picture
@Ulrich Eckert Yes and people forget that BTI owns a very large chunk (almost 30%) of India Tobacco which is growing very fast and growing dividend payments very fast. BTI collects a large and growing haul of dividends from India Tobacco every year.
LittleMilk profile picture
@killiondt I had no idea... thank you for sharing
@killiondt India Tobacco? Interesting. Do you know if that's available for US investors, and a symbol; perhaps via OTC?
Classic case of failure to see the forrest through the trees. Big Tobacco is hated for many good reasons. This industry was a great industry to invest in from the 1950s through much of the 1990s. Not so much anymore. All tailwinds have turned into strong headwinds. Of all the industries to look at for investment, this one comes in last.
@Stephenbakerlaw it's no longer big tobacco tho... its big nicotine now
@w00t That's precisely the problem. Big Tobacco management has proven adept at only one thing - cigarettes. And their success was predicated on decades of lies. The gig was over in the late 1990s.
Great hook for an article. Among other things, I strongly agree on the conclusion. But the thing that strikes me most -- and amuses me most -- is that I keep passing on the 25 you identify here. Over and over. I have felt like I was being a bit too critical until reading this article...but not any more! Still, I will keep looking at them. It is inadvisable to just dismiss a stock based on sentiment.
@jtbjr58 really you keep passing on USB? It’s just dropped recently looks like a great opportunity. It’s my stock of next week to research after DS flagged it.

You don’t like QCOM it’s cheap here and big future in automotive and IoT? Top 10 holding in our drip.

JNJ has a better credit rating the USG seems like it has fit in conservative portfolio. The break up should unleash value.

ENB sold off and is great play. Pipes are valuable and impossible to replace with TCA. They can be repurposed. Great steady income and slow growth, ya the stock has issues. It was a core holding I sold it over 40 bought it back in the 30s recently. It’s a trading stock now due issues like Michigan.

Long all I stop with those, GL
PFE deserves a close look, perhaps even buy much more at these prices, QCOM and JNJ also look very attractive now.
And what about VZ p/e=7
AMGEN, IBM with p/e=13
these may also look good from a VALUE and Dividend perspective
@Cptarg63 Agree with PFE and already own VZ and IBM at lower prices.
Integrall profile picture
Considering adding to my BTI position but the price action keeps giving me pause . Fundamentals still look good, so decision is not easy . .
@Integrall I'm buying while it's cheap I'm not going to wait until the price goes up
Integrall profile picture
About to start to nibble.
I prefer Big Mo nevertheless!
Blue Harbinger profile picture
Maybe if $BTI moves its listing to a US exchange it'll get a valuation bump like $MO
@Blue Harbinger we will see. Nothing is for sure ;-)
Booban profile picture
@Blue Harbinger they don’t have to move. They can be on both. But what’s the disadvantages of being listed on multiple exchanges? Is it expensive?
What happens when FDA abolishes menthol? BTI's Newports largest seller
HATEFEEBAY profile picture
@BOB 135524 As in Canada, they switched to another brand, the data is VERY clear.
ChrisAuw profile picture
@BOB 135524 FDA has already abolished menthol. No?
@BOB 135524 The FDA will be viewed as racist.
Thinking I might swap out MO for BTI. BTI has established vape products, whereas MO is just starting a new line.
@doug pfister do you know BTI has to pay MO over 5% for each pod for Vuse they sell in the USA?
@StevieCool I did not. I’m just a bit skeptical of this new deal after the JUUL deal.
@doug pfister it´s a fact. Big Mo is NOT stupid. Big Mo has great lawyers, too ;-)
Dicktater143 profile picture
Long MO and BTI . Buying at these levels . 👌👌👌
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