Core Viewpoint - The article highlights three top dividend stocks that present strong income-generating potential for investors, emphasizing their ability to provide reliable and growing dividend payments over time. Group 1: British American Tobacco - The tobacco industry is facing challenges from anti-smoking campaigns, but it remains resilient with approximately 1.25 billion smokers worldwide, a slight decrease from 1.36 billion in 2000, and projections of nearly 1.2 billion smokers by 2030 [3][4]. - British American Tobacco (BTI) has a strong international presence, with over half of its business conducted outside the U.S., and it has consistently paid and raised dividends for decades, currently offering a forward-looking yield of over 7.6% [5][6]. - Investors should be aware of potential fluctuations in dividend payments due to exchange rate variations, but the company's dividend history makes it a worthwhile investment [7]. Group 2: Pfizer - Pfizer was a key player in developing a COVID-19 vaccine, leading to a significant increase in its stock price during the pandemic, but shares have since halved due to concerns over future revenue growth [8][9]. - Analysts do not expect revenue growth until after 2027, but Pfizer has a promising pipeline with several cancer drugs that could become blockbusters by 2030, alongside a new weight loss drug [10][12]. - Currently, Pfizer offers a dividend yield of 6.4% and is trading at a low price-to-earnings ratio of 9.1 times expected earnings, presenting a potential buying opportunity [13]. Group 3: Verizon - Verizon has faced stock price declines, down nearly 30% from its 2020 peak, amid concerns over its growth and capital expenditures in fiber optic and 5G technologies [14][15]. - Despite the saturated telecom market, Verizon is focusing on growth areas such as private wireless networking and fixed wireless broadband, which is projected to grow at an annualized rate of 27% through 2032 [17]. - The company has increased its annual dividend payout for 18 consecutive years, currently offering a forward-looking yield of 6.3% and trading at less than 10 times projected earnings, indicating a potential undervaluation [19].

Core Viewpoint - High dividend yields can indicate business weakness, which may lead to poor stock performance and potential dividend cuts in the future [1] Group 1: Company Overview - British American Tobacco (BTI) is facing sector challenges and business missteps, yet it generates strong cash flow and trades at a low earnings multiple [2] - The company has a diverse portfolio of cigarette brands, including Camel, Newport, and Lucky Strike, but is experiencing declining customer volumes [3] Group 2: Business Performance - Cigarette volumes have declined significantly, with a 9% year-over-year drop in combustibles volumes last year, particularly in the U.S. [4] - Despite price increases, combustibles revenue fell by 4% year-over-year in 2024, although it remained flat when adjusted for currency and the sale of the Russian business [4] - Management anticipates further challenges in 2025 due to new excise taxes in Bangladesh and Australia, indicating a long-term decline in the cigarette business [5] Group 3: Growth Potential - British American Tobacco is investing in new nicotine products, including nicotine pouches and heat-not-burn devices, expecting this segment to drive future growth [6] - In 2024, revenue from new categories grew by 8.9% year-over-year to 3.6 billion British Pounds (approximately $4.56 billion), but these products only accounted for 13% of total revenue [7] - The company is lagging behind competitors like Philip Morris International, which derives nearly half of its revenue from new nicotine products [7] Group 4: Dividend Sustainability - Despite current challenges, British American Tobacco's 7.7% dividend yield is deemed sustainable, with expectations for consistent growth in dividends per share [9] - In 2024, the company generated $12.8 billion in operating cash flow and $10 billion in free cash flow, with $3.41 billion remaining after dividend payments [10] - The reduction in debt levels provides the company with the capacity to increase dividend payouts and repurchase stock in the coming years [10][11]

Group 1 - Sensor Unlimited is part of the investing group Envision Early Retirement, which focuses on generating high income and growth through dynamic asset allocation [2] - The group offers two model portfolios: one for short-term survival and withdrawal, and another for aggressive long-term growth [2] - Monthly updates on holdings, tax discussions, and ticker critiques are provided to members [2] Group 2 - Sensor Unlimited has a PhD in financial economics and has spent the last decade covering the mortgage market, commercial market, and banking industry [3] - The focus areas include asset allocation and ETFs related to the overall market, bonds, banking and financial sectors, and housing markets [3]

Group 1 - The article discusses the increasing cost of maintaining a consistent lifestyle over the years, despite careful financial management [1] - It highlights the importance of creating a portfolio that generates income without the need for selling assets, which can alleviate financial stress during retirement [2] - The Income Method promoted by the company aims to provide strong returns with a target yield of 9-10%, appealing to those looking for reliable investment strategies [2] Group 2 - The company offers a month-long paid trial for $49, along with a bonus discount of 5%, to attract potential investors to their investment model [2] - The emphasis is placed on the power of dividends as a means to secure financial stability and support retirement goals [2]

In June 2024, I published my first piece on British American Tobacco (NYSE: BTI ) and it was also the date when I opened a sizeable long position here. Since that moment, I have been able to enjoy ~33% in total returns, seeingRoberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-B ...

Group 1 - The article discusses the investment group The Dividend Kings, which aims to help investors safeguard and grow their money through high-quality dividend investments [2] - The team of analysts associated with The Dividend Kings provides resources such as model portfolios, buy ideas, and company research reports to assist members in making informed investment decisions [2] - The article emphasizes the importance of intelligent investing in dividend stocks, highlighting the community aspect where readers can learn from each other [2] Group 2 - The article includes a disclosure stating that the author has a beneficial long position in the shares of BTI, indicating a personal investment interest [2] - It clarifies that the opinions expressed in the article are those of the author and not influenced by any compensation from companies mentioned [2] - The article notes that past performance is not indicative of future results, emphasizing the need for individual assessment of investment suitability [3]

Cyber Security Risks - The Group acknowledges significant risks from cyber security threats that could impact its business operations, reputation, and financial condition [3518]. - Cyber security is integrated into the Group's overall risk management systems, with processes in place to identify, assess, and manage material risks [3519]. - The Group's cyber security team actively monitors the evolving threat landscape and conducts regular assessments to identify vulnerabilities [3527]. - Any disruption to the Group's information and digital technology systems could lead to financial, legal, and reputational impacts [3530]. - The Group has implemented various technical and organizational security measures to protect the confidentiality, integrity, and availability of its systems and data [3519]. - Personal data breaches could result in legal and reputational issues, potentially leading to a loss of sales and market share [3531]. - The Group's cyber security strategy includes regular training for employees and contractors on best practices and adherence to security standards [3519]. - The Audit Committee reviews the Group's risk register, including cyber security risks, twice annually to ensure effective risk management [3524]. - The Group engages with external assessors to support its cyber security risk assessment and management processes [3519]. - The development and implementation of AI in the Group's products may increase exposure to cyber threats, necessitating enhanced risk management [3529]. Regulatory Compliance Risks - The Group faces risks related to insufficient product stewardship and compliance with product regulations, particularly concerning the Tobacco and Related Products Directive (TPD2) [3532]. - There is uncertainty over product classifications and advertising restrictions, especially for the emerging category of New Categories, which has rapidly increased in complexity [3532]. - Continuous changes in regulations may lead to misinterpretation or non-compliance, resulting in enforcement actions from regulators [3532]. - Financial costs from regulatory enforcement actions could include penalties, product recalls, and litigation costs, impacting the Group's reputation and goodwill [3532]. - Some governments are seeking to ban novel tobacco products and products containing nicotine, affecting market expansion efforts [3532]. - In markets where sales are currently permitted, there are ongoing discussions about potential bans or restrictions on certain flavors of New Categories [3532].

Core Viewpoint - British American Tobacco (BAT) experienced a significant stock sell-off, closing down 7.3% despite overall market gains, following the release of its preliminary full-year results for 2024 which showed better-than-expected earnings but disappointing sales figures and cautious guidance for the future [1][2]. Financial Performance - BAT reported an adjusted profit of 362.5 British pounds per share on sales of 25.87 billion pounds, slightly above analyst expectations for earnings but below sales forecasts [2]. - Overall revenue increased by 1.3% year over year, driven by an 8.9% sales increase in the new category segment, with smokeless products accounting for 17.5% of total revenue [3]. - The revenue from cigarettes and other combustible products rose by 0.1% year over year, supported by a 5.3% price increase that offset a 5.2% decline in unit volumes [3]. Dividend and Shareholder Returns - The company announced a 2% increase in its dividend and introduced a new stock buyback program, indicating a commitment to returning value to shareholders despite some challenges [4]. Future Guidance - For the current year, BAT is guiding for revenue growth of just 1% and adjusted operating profit growth between 1.5% and 2.5%, citing new taxes in Bangladesh and Australia as potential headwinds [5]. - Looking ahead to 2026, the company anticipates sales growth between 3% and 5% and adjusted operating profit growth between 4% and 6% [5]. Market Reaction - Despite the stock's significant decline, the overall financial report was not deemed overly negative, with sustainable dividends and encouraging growth in the smokeless segment suggesting potential for long-term investors [6].

Financial Data and Key Metrics Changes - Group revenue grew by 1.3% in 2024, with new category revenue increasing by 8.9% and adjusted operating profit rising by 1.4% [16][90] - Diluted EPS increased by 3.6%, supported by lower net finance costs and share count, despite a reduced share of ITC profits and tax [37][111] - Adjusted gross profit expanded by GBP400 million, driven by revenue growth management and new category scale benefits [91] Business Line Data and Key Metrics Changes - Smokeless products accounted for 17.5% of group revenue, up 1 percentage point from the previous year, with 3.6 million new smokeless consumers added [4][82] - Vapor revenue fell by 2.5%, impacted by illicit market challenges, while heated products saw Glo revenue increase by nearly 6% [20][97] - Modern Oral revenue grew by 53% in 2024, with significant growth across all regions and a 130 basis point increase in category share [100][101] Market Data and Key Metrics Changes - U.S. revenue declined by 3.4%, primarily due to commercial actions taken over the last 18 months, with the combustibles industry declining by around 9% [29][104] - In AME, revenue grew nearly 5%, driven by higher combustibles revenue and double-digit new category growth, particularly in Modern Oral [106] - APMEA saw total revenue grow by 5.4%, with combustibles up 3.5%, supported by pricing gains despite declines in Australia and supply chain disruptions in Sudan [107] Company Strategy and Development Direction - The company aims for 3% to 5% revenue growth and 4% to 6% adjusted profit from operations (APFO) growth by 2026, focusing on quality growth and innovation [12][75] - A commitment to return cash to shareholders through sustainable share buybacks and progressive dividends was emphasized, alongside a focus on financial flexibility [9][83] - The company is enhancing its innovation ecosystem and expanding its product portfolio to compete effectively in the premium segment [52][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant headwinds in Bangladesh and Australia due to increased taxes and regulations, which are expected to impact 2025 revenue growth [43][120] - The company remains optimistic about its U.S. business recovery and expects to see improvements in financial performance despite ongoing macroeconomic pressures [31][75] - Management highlighted the importance of regulatory enforcement against illicit products to support the legal market and improve overall performance [64][66] Other Important Information - The company achieved close to GBP900 million in cost savings over the last two years and is on track to deliver more than GBP1.2 billion by year-end [35][109] - A GBP6.2 billion provision was recognized in the 2024 results related to the proposed CCAA settlement in Canada, which will affect future reporting [39][114] - The company expects to generate over GBP50 billion of free cash flow between 2024 and 2030, supporting its transformation and capital allocation priorities [42][116] Q&A Session Summary Question: What are the expectations for revenue growth in 2025? - The company anticipates around 1% revenue growth in 2025, impacted by headwinds in Bangladesh and Australia, with APFO growth expected to be between 1.5% to 2.5% adjusted for Canada [47][120] Question: How is the company addressing the challenges in the U.S. market? - Management noted that the U.S. financial performance improved throughout the year, driven by strong performance in combustibles, and emphasized the importance of regulatory enforcement against illicit products [31][63] Question: What is the outlook for new category growth? - The company expects continued strong growth from new categories, particularly Modern Oral, and plans to roll out exciting innovations throughout 2025 [48][75]

Core Insights - The individual has a strong interest in financial markets, particularly in fundamental analysis, which evaluates actual company performance rather than stock price movements [1] - The focus is primarily on long-term investments in stocks and ETFs, with a preference for US companies, while also analyzing European and Chinese firms [1] - The banking sector is highlighted as a key area of interest, viewed as essential for understanding economic health [1] Investment Approach - The investment strategy is characterized by a contrarian view, indicating a willingness to go against prevailing market trends [1] - The individual emphasizes the importance of macroeconomics in investment decisions, suggesting a holistic approach to market analysis [1]