Investing
When You Look Back in 10 Years, You'll Wish You Bought This Massive Dividend Stock
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Investors love dividend stocks, especially the ultra-yield variety because they provide a significant income stream and give investors a great opportunity for massive total returns. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.
At 247 Wall St., we consistently advocate for the reliability of the total return strategy to our readers. When implemented effectively, this approach can substantially enhance your overall investing success. Total return is the combined increase in a stock’s value and dividends, a strategy you can trust.
For example, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%—10% for the increase in stock price and 3% for the dividends paid.
We decided to screen our high-yield dividend stock research database, looking for the one stock that could be a huge winner ten years from now. We settled on one blue chip company that pays a colossal dividend by current standards and has a business with a vast moat and huge upside potential.
Why we are recommending this stock
While the dividend aspect is critical, we also focused on companies with the biggest upside potential from current trading levels. Combined with the hefty dividend, the total return potential is incredible, and the downside is very limited. This is the kind of stock one can hold for years.
British American Tobacco
This European giant continues to print money and pays a massive 1o.16% dividend.
British American Tobacco plc (NYSE: BTI) offers:
- Vapor
- Tobacco heating
- Modern oral nicotine products
- Combustible cigarettes
- Traditional oral products, such as snus and moist snuff
The company offers its products under:
- Vuse,
- Glo
- Velo
- Grizzly
- Kodiak
- Dunhill
- Kent
- Lucky Strike
- Pall Mall
- Rothmans
- Camel
- Natural American Spirit
- Newport
- Vogue
- Viceroy
- Kool
- Peter Stuyvesant
- Craven A
- State Express 555
- Shuang Xi brands
Won’t cigarettes be banned one day ?
The tide against smoking has certainly gained momentum over the last twenty years, especially in the United States. However, in many countries around the world, especially in Asia, smoking is still part of the daily routine. It’s a given that usage will continue to decline in many Western countries. The company has many brands spread around the world, including China, which has a huge population of smokers that is devoted to the Shuang Xi brands.
Vaping remains a trend and is still growing
According to the 2023 FDA Annual National Youth Tobacco Survey, e-cigarettes have been the most popular tobacco product for 10 years in a row. In addition, while vaping continues to replace traditional cigarette smoking for the younger generations, it is seen as a positive lifestyle choice as well. Add in a growing shift to nicotine-free vapes, and the market should remain strong.
The stock could explode higher in coming years
The stock is trading just above a 52-week low, offering investors an incredible entry point. In 2017, the shares traded as high as $72.12; as recently as the summer of 2022, they were seen at $44.24. Closing recently at just $29.25, the upside potential for the shares is gigantic, and the vast dividend mitigates the downside.
When interest rates drop ultra-yield dividend stocks could fly
With surging and sticky inflation and robust employment data, it is entirely possible that the Federal Reserve will wait until after the election to consider rate cuts—or even wait until next year for the first cut. When they do, high-quality dividend stocks will return in demand, like in 2022, and Britain America Tobacco plc will be in the mix.
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