30 Growing Dividend Stocks with Low PE Ratios

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

Forward P/E Ratio as of April 22: 8.96

British American Tobacco p.l.c. (NYSE:BTI) is a multinational company that specializes in cigarettes, tobacco, and various other nicotine products. The company is emerging as a key player in the rapidly growing market for nicotine pouches, with its flagship brand, Velo, gaining traction. The company’s new Velo Plus product line, featuring larger, softer pouches, higher nicotine strengths, and more affordable pricing, is contributing to this growth.

For the fiscal year 2024, British American Tobacco p.l.c. (NYSE:BTI) reported £25.8 billion in revenue, a 5.2% decline compared to the previous year. This drop was mainly due to the sale of its Russian and Belarusian operations in September 2023 and unfavorable currency fluctuations. However, the company saw accelerated growth in the latter half of the year, driven by innovations in its New Categories segment, strategic investments in U.S. operations, and adjustments to wholesaler inventory levels.

British American Tobacco p.l.c. (NYSE:BTI) has also demonstrated robust cash flow generation, maintaining a 100% operating cash conversion rate over the past five years, and achieving 101% conversion in 2024, well above its 90% target. In 2024, it generated £7.9 billion in free cash flow before dividends, with operating cash flow exceeding £10 billion. Over the past five years, BTI has returned £28 billion to shareholders through consistent dividend increases and a sustainable share repurchase program. In 2024, the company initiated £0.7 billion in share buybacks, with plans for an additional £0.9 billion in 2025. It currently offers a quarterly dividend of $0.7431 per share, with a dividend yield of 6.99%, as of April 22.