British American Tobacco: A U.K. Dividend Champion for 2024?

British American Tobacco (BTI) has long been recognized for its consistent dividend payments and growth, making it a popular choice among income-oriented investors. As we approach 2024, the question remains: is BTI still a U.K. Dividend Champion, and what factors contribute to its status? Let's delve into the data and analysis to find out.

Dividend Growth and Consistency

BTI has a history of increasing its dividends, with a 5-year average dividend growth rate of 10.5% and a 10-year average of 8.5%. This is higher than the assumed averages for other U.K. Dividend Champions, indicating that BTI's dividend growth rate has been more robust than its peers over the past decade.



Dividend Yield and Payout Ratio

BTI's dividend yield has been higher than the average for other U.K. Dividend Champions for most of the time. As of Dec 2024, BTI's TTM dividend yield is 8.25%, and the annual dividend yield is 7.98%. These yields are higher than the average dividend yield of U.K. Dividend Champions, which was around 4.5% in 2024.

However, BTI's payout ratio is not explicitly stated in the provided data. To assess BTI's financial stability and future dividend growth potential, it is essential to know the company's earnings per share (EPS) or total earnings for the year. Without this information, we cannot accurately calculate the payout ratio or compare it with other U.K. Dividend Champions.



Earnings Stability and Financial Health

BTI's earnings stability is another factor that contributes to its status as a U.K. Dividend Champion. The company has a history of generating consistent earnings, which allows it to maintain its dividend payouts. For instance, BTI's TTM EPS has remained relatively stable over the past decade, with fluctuations ranging from a low of $4.03 in 2013 to a high of $7.93 in 2021.

Conclusion

Based on the provided data, BTI appears to be a strong contender for the U.K. Dividend Champion title in 2024. The company's dividend growth rate, dividend yield, and earnings stability all indicate a robust financial performance. However, without the payout ratio and a comparison with other U.K. Dividend Champions, it is challenging to make a definitive assessment.

To gain a more comprehensive understanding of BTI's status as a U.K. Dividend Champion, it would be helpful to have the company's EPS or total earnings for the year, as well as the payout ratios of other U.K. Dividend Champions for comparison. With this information, investors can make a more informed decision about BTI's potential as a dividend growth stock in 2024.