BAT dividend: cash cover and yield
BAT's base-case forecast dividend per share rises from £2.475 to £2.575 over the forecast years shown. In 2025, BAT's own free cash flow was £3,790m against £5,238m of dividends, so that cash measure did not cover the dividend.
How much does BAT pay per share over the years shown?
Base dividends per share rise from £2.475 to £2.524 and then £2.575. This follows the two latest 2% increases and management’s progressive-dividend policy. The bear case gives £2.45, then £2.39 and £2.33, reflecting recent cash-flow pressure. The bull case gives £2.50, £2.60 and £2.70, requiring stronger cash conversion. Dividends exceeded free cash flow in 2025 and the first half of 2026, so acceleration is not the central assumption.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Earnings | 7,759 (7,095 / 8,010) | 7,992 (6,885 / 8,596) | 8,284 (6,678 / 9,261) |
| Shares (millions) | 2,136 (2,147 / 2,131) | 2,115 (2,135 / 2,106) | 2,096 (2,123 / 2,084) |
| Dividends per share | 2.48 (2.45 / 2.50) | 2.52 (2.33 / 2.60) | 2.58 (2.33 / 2.70) |
| Price to earnings | 10.80 (8.50 / 13.00) | 10.80 (8.00 / 14.00) | 10.80 (7.50 / 15.00) |
Is BAT's dividend covered by its cash?
- Settlements and debt. Canada initially directs 85% of qualifying after-tax income to settlement payments; BAT paid £2,560m upfront in 2025. The company’s own free cash flow was £3,790m against £5,238m of dividends, restricting debt reduction and investment.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| Free cash flow | 3,790 | 7,612 | 8,239 | 7,974 | 7,316 |
| − Dividends paid | 5,238 | 5,213 | 5,055 | 4,915 | 4,904 |
| − Share buybacks | 1,112 | 698 | 0 | 2,012 | 0 |
| = Free cash flow not paid out | 1,580 | 3,079 | 889 | 2,262 | |
| = Paid out more than the free cash flow | 2,660 | ||||
| Paid out, % of free cash flow | 167.5% | 77.7% | 61.4% | 86.9% | 67.0% |
What could change BAT's dividend?
For 2026, management guides to revenue growth of 3.0–5.0%. It guides to adjusted operating-profit growth of 4.0–6.0% and adjusted diluted EPS growth of 5.0–8.0%, at constant exchange rates and adjusted for Canada where stated. It targets adjusted net debt to adjusted EBITDA of 2.0–2.5x and a £1,300m share buyback in 2026. Horizon 2030 targets New Category contribution margin of at least 30.0%, versus 13.8% in the first half of 2026.
What is BAT's dividend yield today against its share price?
At 4,194.00p on 11 October 2026, one share represents a small ownership interest in BAT. Market value was £90,473.39 million; enterprise value was £122,490.39 million. Enterprise value estimates the operating business belonging to both shareholders and lenders. Like buying a shop with a mortgage, the buyer must account for the debt as well as the price paid to the owner. BAT reported net debt of £32,555 million at 30 June 2026, so lenders have a prior claim on the business.
| Today (Oct 11, 2026) | |
|---|---|
| Share price | 4,194.00 |
| Market value (calculated) | 90,473.39 |
| Enterprise value (calculated) | 122,490.39 |
| Free cash flow yield (calculated) | 4.2% |
| Real free cash flow yield (calculated) | 4.1% |
| Dividend yield (calculated) | 5.8% |