One Of My Best Value Stocks Right Now Why I Continue To Hold BTI For Income And Long Term Value

British American Tobacco is not a flashy stock. It is not a momentum play, it is not a tech story, and it is definitely not something people brag about owning at a cocktail party. What it is, however, is one of the best value positions I hold.

When I started buying BTI, the stock was around $29. At that price the valuation made very little sense compared to the amount of cash the business was generating. The market was pricing it like a company in permanent decline, while the actual financials told a very different story.

One of the biggest reasons I continue to hold it is the dividend. BTI has consistently paid a high yield that sits well above the market average, and that income shows up whether the stock is exciting or not. For investors focused on cash flow, that kind of reliability matters more than daily price movement.

The dividend has not just stayed high, it has shown steady support from the company’s underlying earnings. This is not a situation where the payout is being forced or borrowed into existence. The company generates significant free cash flow, and a large portion of that gets returned directly to shareholders.

Value investing often means buying what others are avoiding. Tobacco as a sector has been out of favor for years, which is exactly why the valuations can become attractive. The headlines are rarely positive, yet the balance sheets and income statements remain strong.

I do not have to love the product to recognize the investment case. Markets are not about personal preferences. They are about numbers, cash generation, and whether a company can continue to reward shareholders over time. BTI checks those boxes.

Another factor is pricing power. Companies in this space have historically been able to adjust pricing to offset volume declines, which helps maintain revenue stability even in a challenging environment. That ability has supported margins and allowed continued dividend payments.

BTI has also been working to reduce debt and streamline operations after past acquisitions. As leverage comes down, the financial position improves, which adds another layer of support for long term holders.

From a valuation standpoint, the stock has often traded at a lower multiple than the broader market despite producing strong cash flow. That disconnect is exactly what value investors look for. You are not paying for hype. You are getting paid to wait.

This is not a stock I expect to double overnight. It is a position built around income, stability, and the idea that undervalued businesses eventually get recognized, even if it takes time.

In a market that often chases growth at any price, holding something like BTI provides balance. The dividend continues to come in, the fundamentals remain intact, and the valuation still looks reasonable compared to many other sectors.

That is why I continue to hold it. It may not be the most popular name in the portfolio, but it has proven to be one of the most dependable when it comes to value and income.

Thank you for dropping by. As always, all writing on this blog is original and written by me. The blog cover image was created with ChatGPT by OpenAI because I am a terrible artist in both the physical and digital world. All text is mine, with one spellcheck after completion using ChatGPT by OpenAI.