Core Viewpoint - Tobacco stocks, particularly Philip Morris International and British American Tobacco, are appealing for dividend investors, with Philip Morris being favored for its growth and transition to smoke-free products [2][20]. Business Model Comparison - Philip Morris International is recognized for its international cigarette brands and the IQOS heat-not-burn product, which accounted for 36.5% of its revenue in 2023 [2][12]. - British American Tobacco, known for brands like Camel and Newport, recently took a $31 billion write-down on its U.S. cigarette business, indicating a shift towards smoke-free products [3][12]. Financial Performance - Philip Morris reported a 13.7% increase in organic gross profit to $5.6 billion and a 22.2% rise in organic operating income to $2 billion [4]. - British American Tobacco's adjusted organic revenue rose 3.1% to £27.3 billion ($34.02 billion), with adjusted operating profit increasing 3.9% to £12.5 million ($15.5 million) [5]. Dividend and Valuation - British American Tobacco offers a higher dividend yield of 9.5% compared to Philip Morris's 5%, and BAT is cheaper with a price-to-earnings ratio of 6.7 versus Philip Morris's 16.9 [6][18]. Recent Performance and Growth - Philip Morris achieved an 11% increase in organic revenue to $8.8 billion in Q1, with significant growth in smoke-free products, including a 20.9% rise in heated tobacco units [15]. - British American Tobacco's new categories saw a 21% revenue increase, contributing to 12% of its total revenue [14]. Overall Assessment - Philip Morris is seen as the better stock due to faster growth and progress in smoke-free product development, despite British American Tobacco's advantages in dividend yield and valuation [17][20].

Core Viewpoint - British American Tobacco (BAT) has underperformed compared to the S&P 500 Consumer Staples Index, with a year-to-date increase of less than 2% against the index's 7.1% rise, and a significant 27% price decline in 2023 [2][3] Financial Performance - BAT's revenue growth for 2023 was in line with guidance, particularly driven by strong performance in new categories, which contributed to operating profits two years ahead of schedule, enhancing the operating margin to 45.7% [3][4] - The share of new categories in revenue increased by 1.8 percentage points to 12.3%, although still trailing behind Philip Morris, which has 39% from smoke-free products [4] Dividend and Valuation - The forward dividend yield is robust at 9.8%, with a current yield of 9.6%, indicating strong returns for investors [5] - The forward non-GAAP price-to-earnings (P/E) ratio stands at 6.6x, significantly lower than its five-year average of 8.7x, making it attractive compared to peers [6] Market Position and Growth Drivers - BAT's vape brand Vuse has improved its market penetration to 41% in key markets, up from 36% in 2023, indicating strong growth potential [7][8] - Velo, BAT's modern oral brand, has also seen an increase in market share, reaching 10.3% in key markets, up from 8.6% in 2023 [8] Regulatory Challenges - The US market, accounting for approximately 44% of BAT's revenue, poses significant challenges, including a 90 basis points decline in Vuse's value share due to the rise of illicit single-use vapes [9][10] - Regulatory actions, such as marketing denial orders from the US FDA, have impacted sales of popular products like Vuse Alto, complicating the transition to non-smokeable products [10] Future Outlook - BAT anticipates growth in new categories to be weighted towards the second half of the year, with expectations of low-single figure organic constant currency revenue growth for the full year [11] - Despite ongoing regulatory challenges, BAT's strong adjusted profit margins and attractive dividend yield support a positive outlook for the stock [11]

These dividend stocks look like great buys. British American Tobacco The Vuse brand of vaping products currently has a global value share of 41.1% in the company's key markets and a 51.5% share in the U.S. The glo brand of tobacco heating products enjoys a 16.8% volume share in key markets, and the Velo brand of modern oral products has a 27% volume share in key markets. The company expects volumes and revenue to accelerate across these businesses in the second half of the year. The company plans to spend 7 ...

Looking for dividend income? Check out British American Tobacco (BTI -0.83%). At its current price and payout, the stock's dividend yields an impressive 9.5%. How much would you need to invest to produce a passive income stream of $1,000 a year? While the use of combustible tobacco is on the decline in several mature markets, including the United States, total tobacco use is still on the rise globally. That's especially true when you factor in smokeless products such as vapes and nicotine pouches -- which t ...

Finding good dividend stocks to buy amid market turbulence is essential in today's investing environment to maximize profits and minimize risks. These seven dividend stocks to buy have performance indicators that lead in a variety of industries. They also provide intriguing prospects fueled by resiliency, creativity and calculated risks. The first and second are industry titans, showing a considerable increase in their users. Both businesses have grown their clientele despite pressure from the competition, ...

British American Tobacco p.l.c. (NYSE:BTI) 2024 First Half Pre-Close Trading Update Conference Call June 4, 2024 3:30 AM ET Company Participants Victoria Buxton - Group Head of Investor Relations Tadeu Marroco - Chief Executive Soraya Benchikh - Chief Financial Officer Conference Call Participants Rashad Kawan - Morgan Stanley Faham Baig - UBS Philip Spain - JPMorgan Rey Wium - SBG Securities Richard Felton - Goldman Sachs Simon Hales - Citi Operator Hello, and welcome to the BAT Pre-Close Trading Update. I ...

British American Tobacco p.l.c. (NYSE:BTI) 2024 First Half Pre-Close Trading Update Conference Call June 4, 2024 3:30 AM ET Company Participants Victoria Buxton - Group Head of Investor Relations Tadeu Marroco - Chief Executive Soraya Benchikh - Chief Financial Officer Conference Call Participants Rashad Kawan - Morgan Stanley Faham Baig - UBS Philip Spain - JPMorgan Rey Wium - SBG Securities Richard Felton - Goldman Sachs Simon Hales - Citi Operator Hello, and welcome to the BAT Pre-Close Trading Update. I ...

Co-authored by Treading Softly Thomas Barwick Janus Henderson It's an indisputable fact that trillions of dollars' worth of dividends are being paid out to shareholders annually. We can see from the chart above that even though there was a dip in 2020 when the economy was filled with uncertainty, and companies decided to retain more capital in preparation for it, dividends were still a massive source of capital flowing through the market. In February, Meta (META) initiated its first-ever dividend payment an ...

This tobacco stock offers one of the most generous yields on the market. It's no secret among income investors that tobacco stocks are some of the best places to look for high dividend yields. Tobacco companies have long been the source of reliable profits, and they've historically returned much of those profits to investors through dividends, not having to spend much on things like research and development or capital expenditures. Even today, in an era when cigarette sales continue to decline, tobacco stoc ...

British American Tobacco is doing a good job shifting away from cigarettes, but there's another risk investors need to watch. British American Tobacco (BTI 2.27%) has a huge 9.7% dividend yield. Given the roughly 1.3% yield on offer from the broader market, the ultra-high yield is a clear sign of increased risk. That's not shocking, given that the company's main product is facing a secular decline. But there's more to worry about here than just cigarettes. British American Tobacco is doing reasonably well T ...