British American Tobacco offers strong value with 6% dividend yield and growth in next-gen products.

British American Tobacco (BTI) is trading at a compelling valuation of 11.5 times forward earnings and offers a 6% dividend yield. Its next-generation products (NGP) segment revenue grew 18% year-over-year, with Velo becoming the global leader in Modern Oral products and gaining strong market share in the U.S. Management expects adjusted earnings per share to grow 5–8% by 2026, driven by momentum in NGP and improving profitability. The analyst maintains a 'Strong Buy' rating, anticipating mid-teens annual total returns as valuation normalizes and NGP growth offsets declines in cigarette sales.