10 Safest Dividend Stocks in the UK

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

Number of Hedge Fund Holders: 24

British American Tobacco p.l.c. (NYSE:BTI) is a manufacturing company, based in London. The company specializes in cigarettes, tobacco, and various other nicotine products. It is working to reduce its dependence on traditional combustible tobacco by focusing on smokeless alternatives, aiming for these products to make up 50% of its revenue by 2035. The company holds a strong position in the vapor market with its Vuse brand, which controls a 40.3% value share in key markets. In addition, BTI is expanding its footprint in the modern oral segment with its Velo brand. This strategic shift helps the company maintain its leadership in the growing market for tobacco alternatives, ensuring sustainable growth as demand for traditional smoking products declines.

In the first half of 2024, British American Tobacco p.l.c. (NYSE:BTI) saw a 6.8% drop in cigarette sales compared to the same period in 2023, following declines of 5.3% in 2023 and 5.1% in 2022. This persistent downturn significantly impacted the company’s stock, causing its market value to fall by over 40% at one point. However, similar to others in the industry, the company countered the effects of reduced sales by raising prices, which helped boost profits and led to a recovery in its stock price. Despite the decrease in sales volume, the addictive nature of nicotine has helped maintain a loyal customer base.

British American Tobacco p.l.c. (NYSE:BTI) stands out as one of the best FTSE dividend stocks on our list due to its consistent dividend track record. The company forecasts generating around £40 billion (roughly $50.57 billion) in free cash flow over the next five years, excluding dividend payouts. Moreover, it has consistently raised its annual dividend since 2018. The company currently pays a quarterly dividend of $0.7431 per share for an attractive dividend yield of 7.08%, as of February 10.