Top 10 High Dividend Yielding Consumer Defensive Stocks To Buy

1. 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.

BTI is not on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held BTI at the end of the fourth quarter, which was 24 in the previous quarter. 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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