We recently published a list of Top 10 High Dividend Yielding Consumer Defensive Stocks To Buy. In this article, we are going to take a look at where British American Tobacco p.l.c. (NYSE:BTI) stands against other top high dividend yielding consumer defensive stocks to buy.
Consumer defensive stocks tend to perform well in uncertain times because they sell essential items such as household products, healthcare items, and food and beverages, among others. Such companies also tend to have a strong pricing power which helps them to easily pass on increasing costs to consumers.
The US market continues to struggle due to concerns over tariffs, geopolitical issues, and politics. In such times, consumer defensive stocks offer a way to protect one’s portfolio from this uncertainty.
When such shares also offer a high dividend yield, it performs a killer combination, loved by defensive investors looking to park their money for reliable passive income. We therefore decided to come up with a list of the top 10 high-dividend-yielding consumer defensive stocks.
To come up with the list of top 10 high-dividend consumer defensive stocks, we only considered stocks from the consumer defensive sector with a market cap of at least $10 billion and a dividend yield of at least 4%.
A close-up of an array of tobacco products, emphasizing the selection and consumer choice.
British American Tobacco p.l.c. (NYSE:BTI)
British American Tobacco p.l.c. is a nicotine and tobacco products maker. The company offers combustible cigarettes; heated, vapour, and modern oral nicotine products; and traditional oral products. It sells its products under different brands, including Rothmans, Natural American Spirit, Lucky Strike, Velo, Vuse, and Camel, among others.
BTI stands out as a compelling investment opportunity in today’s market because of its healthy dividend yield of 7.34%. With its discounted valuation and high dividend yield, the company provides a combination of growth and income generation to investors.
The company’s stock has performed well so far this year after an impressive 2024. The future guidance has a lot to do with this performance. As per the guidance, the expected revenue growth for 2025 is 1% while for 2026 it is 3% to 5%. Adjusted profits from operations are projected to grow by 1.5% to 2.5% in 2025, followed by a 4% to 6% estimated growth in 2026.
CFO Soraya Benchikh echoed similar optimism about the company’s future by saying:
“Having achieved close to GBP 900 million in savings over the last 2 years, we are on track to deliver more than GBP 1.2 billion by year-end… Beyond 2025, we aim to simplify combustibles and drive scale benefits in New Categories, targeting an additional GBP 2 billion in savings by 2030.”
BTI has consistently paid out a high dividend yield with its 5-year average at 7.7%. The buybacks add further shareholder value, making it our top choice for dividend investors.
Overall, BTI ranks 1st on our list of top high dividend yielding consumer defensive stocks to buy. While we acknowledge the potential of BTI as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as BTI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
