13 Best Dividend Stocks to Buy Under $50

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

Number of Hedge Fund Holders: 24

Share Price as of the Close of December 20: $36.24

British American Tobacco p.l.c. (NYSE:BTI) ranks tenth on our list of the best dividend stocks under $50. The London-based company specializes in the manufacturing of cigarettes, tobacco, and various other nicotine products. The company has faced substantial challenges recently, including a sharp 34% decline in its stock price between June 2022 and April 2024, significantly underperforming compared to the broader market. While the company has shown signs of recovery, it remains below its historical growth trajectory, largely due to a substantial $31.5 billion write-down in 2023. This development has raised concerns among investors about whether BTI represents a value opportunity or a potential liability, especially as it shifts its focus from traditional tobacco products to next-generation nicotine offerings like vapes and pouches.

In the first half of 2024, British American Tobacco p.l.c. (NYSE:BTI) saw a 6.8% decline in cigarette sales compared to the same period in 2023. This followed volume drops of 5.3% in 2023 and 5.1% in 2022, contributing to a sharp decline in the company’s stock, with its market capitalization falling by over 40% at one point. However, like others in the industry, British American Tobacco has countered declining volumes by raising prices, leading to higher profits this year and a subsequent stock rebound. Thanks to the addictive nature of nicotine, smokers tend to be a loyal and consistent customer base. In the past 12 months, the stock has surged by over 24%.

In addition, British American Tobacco p.l.c. (NYSE:BTI)’s strong dividend history makes it an attractive investment for income investors. The company anticipates generating £40 billion (approximately $50.57 billion) in free cash flow, excluding dividends, over the next five years. It has raised its dividend every year since 2018, which makes BTI one of the best dividend stocks on our list. The company offers a quarterly dividend of $0.7431 per share and has a dividend yield of 8.27%, as of December 23.

The number of hedge funds tracked by Insider Monkey owning stakes in British American Tobacco p.l.c. (NYSE:BTI) grew to 24 in Q3 2024, from 21 in the previous quarter. These stakes have a total value of more than $1.3 billion. Rajiv Jain’s GQG Partners owned the largest stake in the company in Q3.