10 Low PE High Dividend Stocks to Buy Now

2. British American Tobacco p.l.c. (NYSE:BTI)

Forward P/E Ratio: 8.30

Dividend Yield as of February 16: 7.72%

British American Tobacco p.l.c. (NYSE:BTI) is a London-based manufacturing company that specializes in cigarettes, tobacco, and various other nicotine products. The company viewed 2024 as a year of investment, with performance aligning with its projections. Throughout the year, it continued its transformation, adding 3.6 million adult consumers to its smokeless product segment, bringing the total to 29.1 million. These products now contribute 17.5% of the company’s total revenue, reflecting a 1.0 percentage point increase compared to fiscal year 2023. The company reported revenue of £25.8 billion in FY24, representing a 5.2% decline from the previous year. This decrease was primarily attributed to the sale of its businesses in Russia and Belarus in September 2023, along with unfavorable currency translation effects.

British American Tobacco p.l.c. (NYSE:BTI) has surged by over 27% in the past 12 months. The company experienced accelerated performance in the second half of the year, driven by the rollout of innovations in its New Categories segment, the impact of strategic investments in US commercial initiatives, and the reversal of related wholesaler inventory movements. Looking ahead to 2025, regulatory and fiscal challenges in Bangladesh and Australia are expected to weigh on the performance of its combustibles segment. However, the company remains confident in its ability to build on its progress as it transitions from an investment phase to full-scale deployment. It remains committed to returning to its mid-term targets of 3-5% revenue growth and 4-6% adjusted profit from operations growth, on a constant currency basis, by 2026.

British American Tobacco p.l.c. (NYSE:BTI) has demonstrated strong cash generation, achieving 100% operating cash conversion over the past five years, with a conversion rate of 101% in 2024—surpassing its 90% target. During the year, it generated £7.9 billion in free cash flow before dividends, while operating cash flow exceeded £10 billion. Over the past five years, the company has returned £28 billion to shareholders through a combination of progressive dividends and a sustainable share buyback program. In 2024, it initiated £0.7 billion in share repurchases, with an additional £0.9 billion committed for 2025. The company’s quarterly dividend sits at $0.7431 per share for a dividend yield of 7.72%, as of February 16.