If I Could Only Buy 2 Dividend Stocks, It Would Be These: AMT and BTI for 2025

In an era of economic uncertainty, income-focused investors are increasingly prioritizing dividend stocks that balance reliability with growth potential. Two names that stand out in 2025 are American Tower Corp. (AMT) and British American Tobacco PLC (BTI). These companies offer compelling combinations of consistent yields, robust fundamentals, and strategic adaptability—making them ideal anchors for a resilient dividend portfolio.

American Tower Corp. (AMT): Infrastructure's Steady Giant

American Tower Corp. has long been a cornerstone of the real estate sector, leveraging its dominance in wireless infrastructure to deliver predictable cash flows. As of July 2025, AMT trades with a dividend yield of 3.47% and a payout ratio of 290.63%. While the high payout ratio may raise eyebrows, it reflects the company's reliance on strong operating cash flow rather than earnings to fund dividends.

AMT's historical dividend growth is nothing short of remarkable. Over the past decade, it has increased its dividend at a compound annual growth rate (CAGR) of 14.16%, with a 10-year streak of consecutive raises. This consistency is underpinned by its business model: leasing space on its towers to telecom providers, a sector where demand is only growing with the rollout of 5G.

Recent financial results, however, reveal a mixed picture. In Q2 2025, AMT reported a 3.2% year-over-year revenue increase to $2.627 billion, driven by core property revenue and foreign exchange tailwinds. Yet net income dropped 58.1% due to currency losses—a short-term headwind rather than a structural issue. The company's $10.5 billion liquidity and disciplined capital allocation (e.g., a $185 million acquisition of a data center in Denver) position it to navigate volatility while maintaining its dividend.

British American Tobacco PLC (BTI): The Smoker's Resilience

British American Tobacco (BTI) is a rare breed: a “sin stock” with a dividend yield of 5.95% and a conservative payout ratio of 1.70%. This low ratio—meaning the company pays out just 1.7% of earnings as dividends—ensures ample flexibility to sustain payouts even during downturns. BTI has raised dividends for 29 consecutive years, a testament to its operational discipline.

The company's strength lies in its dual revenue streams: 80% from traditional combustibles (e.g., Camel and Lucky Strike) and 18.2% from smokeless products like Velo Plus and Glo Hilo. While global smoking rates decline, BTI's pivot to next-gen nicotine products has offset losses. Smokeless revenue grew by 0.7 percentage points in 2025, and cost-cutting initiatives (e.g., £402 million in 2024 savings) have bolstered margins.

BTI's forward P/E ratio of 11 is a bargain compared to the sector median of 16, reflecting its undervaluation despite robust cash flow generation. The company also returned £1.1 billion to shareholders via buybacks in 2025, enhancing total returns. Its ability to balance ethical concerns with innovation (e.g., reduced-risk nicotine products) makes it a compelling choice for investors wary of traditional tobacco exposure.

Why These Two Stocks?

AMT and BTI represent two distinct but equally compelling approaches to dividend investing:
1. AMT thrives in infrastructure, a sector insulated from cyclical downturns. Its exposure to 5G and data centers ensures long-term demand, while its high yield and growth trajectory make it a lynchpin for income portfolios.
2. BTI leverages its brand power and diversification into smokeless products to maintain resilience. Its conservative payout ratio and undervaluation offer a margin of safety, even as it navigates regulatory and social challenges.

Historical performance around dividend announcement dates further strengthens their case. A backtest from 2022 to the present shows that both AMT and BTI delivered positive returns for all win rates and maximum returns, validating the potential of a buy-and-hold strategy aligned with their dividend schedules.

Investment Advice for 2025

• For AMT, focus on its operational execution and 5G infrastructure expansion. While short-term currency volatility may pressure net income, its liquidity and core business strength suggest dividends will remain intact.
• For BTI, monitor the adoption rate of smokeless products and regulatory developments in key markets. Its low payout ratio provides a buffer, but long-term success depends on its ability to transition from combustibles.

In uncertain markets, the ideal dividend stock is one that balances yield with durability. AMT and BTI exemplify this balance, offering a mix of high income, growth potential, and strategic adaptability. For investors seeking stability in 2025, these two names form a powerful duo.

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