British American Tobacco p.l.c. (BTI)
Official siteCONSUMER DEFENSIVE • TOBACCO • NYSE
Market Cap: $120.92B
Last updated: Sep 01, 2026 at 10:00 AM ET
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British American Tobacco: The Price Already Assumes Decline
Current reconciled price $57.65 implies reverse-DCF unlevered cash CAGR of -0.9% at 8.5% WACC, 3% terminal, rising to +2.9% requirement at a 9.5% WACC New Categories grew 18.0% CC, GBP1,928m of GBP12,235m group revenue (15.8%); modern oral +65.9% revenue growth, 39.2% volume share, contribution GBP257m Restructuring touches ~9,000 roles, targets GBP600m annualized savings by 2028 (GBP500m by 2027); management cuts net finance costs to ~GBP1.65bn and has a GBP1.3bn buyback (~1.4% market value) Material regional divergence - Americas revenue +8.5% and adj op profit +10.1%, Asia-Pacific, Middle East & Africa revenue -6.3% and adj profit -16.5% - APACMEA is the softest risk Blended fair value $68.07 (internal DCF $77.10, mature multiple $65, Greenwald EPV $45.52) implies 15.3% margin of safety; 11.68x on 2028 $5.63 EPS yields ~$65.80, ~11-12% p.a.
The Vulcan Income Engine: A 15-Holding Model Portfolio Built for Retirement Cash Flow
Vulcan Income Engine is a five-engine, 15-holding model scaled to $100,000, launched May 29, 2026, producing roughly 4.4% starting income, built for durable retirement cash flow rather than headline yield SGOV is strategic dry powder at 12.59%, 30-day SEC yield ~3.5% - it funds withdrawals and rebalances during drawdowns, with primary risk being reinvestment if short rates fall The fixed-income sleeve (SGOV, IEF, MUB, SUB) totals 31.6%, sized to counter equity drawdowns - IEF provides duration, MUB/SUB provide municipal diversification, not yield maximization Dividend-growth and defensive equities form roughly 28% (CGDV, LVHI, PEP, WEC) to carry long-run participation, while SPYI is deliberately capped near 7% to avoid an options-income overhang Real-asset and risk-aware slots include EPD 7.35%, ENFR 5.25%, O 5.28%, VICI 5.25% and BTI/PFE ~9% combined - treat as equity cash-flow positions and allocate MUB/SUB, EPD, O by tax-account suitability
Paid 4.7% to Wait: Why Sanofi Anchors My Defensive Sleeve
SNY offers 32% margin of safety to $63 BFV with 94 quality score, among highest in my tracked universe Beta of 0.27 makes SNY genuine defensive ballast vs AI/growth holdings (NVDA 2.09, GOOGL 1.16, META 1.51) 4.7% yield with 18% debt and 19.1x interest coverage, collecting income while waiting for valuation gap to close GNG and my Blended Fair Value (BFV) all cluster $63-69 vs $46.50 current price, creating asymmetric risk/reward setup Building toward 0.50% target weight alongside PFE (1.50%), BTI (1.50%), MO (1.00%) in defensive income sleeve (among others not mentioned) Technical support at $45.25, accumulating in $45-47 range, Q4 earnings Jan 29 may create volatility opportunity Pipeline transitions are real concern but priced too pessimistically: Piotroski 8/9, 72% gross margin, $3.74 FCF/share
Altria: What Income Investors Need To Know About This Legendary Dividend Machine (And Why I'm Not Buying It Personally)
Altria is the best performing stock in history, turning $1 into $2.7 million over 100 years ($143K adjusted for inflation). BUT "Past performance is no guarantee of future results." PM started working on iQOS is 2008 (the spin-off year). BTI is the world leader in vaping (though struggling with non-approved mods) and MO? It's RRP guidance is very disappointing. Management says its goal is 10% RRP revenue in 2028...33% lower than BTI's 2025 levels. PM is on track for 66% by 2030, so roughly 6X better than MO's target in 2028. MO's volume declines have accelerated to 11%, crushed by 10% to 11% price hikes and consumers who are inflation-scarred (not to mention FDA regulations that keep tightening). MO is NOT participating in heat sticks (the growth engine of nicotine) and its vaping brands are FDA approved (and vapers don't use them). Owning 20% of BUD isn't as helpful given that 46% of Americans don't drink. Even Cannabis is something that likely won't help MO (since older smokers don't smoke weed and cannabis users don't like big tobacco). Altria has never posted negative earnings growth (at least not for 20 years but I think ever). But in 2028 it's expected to post its first negative growth year (due to 11% volume declines being almost insurmountable). While 10% total returns are possible in the future, the risk of negative growth leading to a PE compression to 7.5, indicates a potential -5% CAGR inflation-adjusted 3 year return. BTI and PM are better alternatives.
British American Tobacco: What Investors Need To Know (Another Potential Ultra ZEUS V2 Candidate)
British American Tobacco is the #2 global tobacco company, including in the all important reduced risk product segments. BTI is catching up to PM in terms of heat sticks, nicotine pouches and vaping, though it has experienced some success in Asia and Easter europe on those fronts. BTI's US RRP sales are struggling with the FDA not enforcing non-approved vaping mods and e-liquids. Management is trying to get the FDA to crack down. FCF/share growth through 2028 is expected to be 7.8%, though long-term growth of 4% to 6% is what management is guiding for (and the growth since 2011). BTI's dividend safety is impeccable thanks to the lowest payout ratio (65%), steadily falling leverage (2.7 and on its way to 2.3X in 2027 vs 3 safe), and a solid BBB+ credit rating and 25 year dividend growth streak. PEGY analysis indicates the stock is priced for 4.5% growth (the historical norm) BUT with 7.8% growth actually expected, a PEGY discount of 42% potentially creates around 80% total return potential in 2026. Morningstar's fair value assumes 12.5 PE (the historical median) with analyst consensus 14X and the PEGY indicating that if BTI keeps growing at 8% it's worth 20X. 12% to 13% CAGR total return is the base-case outlook for the next 5 years (about 1% higher than PM) and for a 3+ year portfolio adding BTI to a PM containing portfolio (like Ultra ZEUS V2) is a good idea.
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Frequently Asked Questions About BTI
- What is BTI's current dividend yield?
- British American Tobacco p.l.c. (BTI) has a current dividend yield of 5.83%.
- Does BTI pay dividends?
- Yes, British American Tobacco p.l.c. pays dividends with a current yield of 5.83%.
- What is BTI's P/E ratio?
- British American Tobacco p.l.c. has a price-to-earnings (P/E) ratio of 12.11.
- What is BTI's market cap?
- British American Tobacco p.l.c. (BTI) has a market capitalization of $120.92B with a current stock price of $55.59.
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