12 Incredibly Cheap Dividend Stocks to Buy Now

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

Forward P/E Ratio as of March 14: 8.90

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 its performance meeting expectations. Throughout the year, the company continued its transformation efforts, 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 total revenue, up by one percentage point from 2023.

For FY24, British American Tobacco p.l.c. (NYSE:BTI)’s revenue came in at £25.8 billion, reflecting a 5.2% decline from the previous year. This drop was largely attributed to the sale of its operations in Russia and Belarus in September 2023, as well as unfavorable currency exchange effects. However, growth accelerated in the second half of the year, driven by innovations in its New Categories segment, strategic investments in U.S. commercial initiatives, and a reversal of earlier wholesaler inventory movements.

Looking ahead to 2025, regulatory and fiscal challenges in Bangladesh and Australia are expected to weigh on the company’s combustibles segment. Still, British American Tobacco p.l.c. (NYSE:BTI) remains optimistic about building on its progress as it transitions from an investment phase to full-scale execution. It remains committed to its mid-term goals 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 also maintained strong cash flow generation, consistently achieving 100% operating cash conversion over the past five years, with a 101% conversion rate in 2024—exceeding its 90% target. Last year, it generated £7.9 billion in free cash flow before dividends, while operating cash flow surpassed £10 billion. Over the past five years, the company has returned £28 billion to shareholders through a combination of steady dividend growth and a sustainable share repurchase program. In 2024, it initiated £0.7 billion in share buybacks, with plans for an additional £0.9 billion in 2025. It currently pays a quarterly dividend of $0.7431 per share and has a dividend yield of 7.24%, as recorded on March 14.