Today’s market turmoil has hit most FTSE 100 stocks, including one renowned dividend payer with long-standing defensive qualities. Yet it still ranks among the steadier names on the index and the valuation looks reasonable to me. Is this a good opportunity to buy it at a slight discount?

The company in question is British American Tobacco (LSE: BATS), which boasts one of the strongest dividend records on the entire blue-chip index. The group has increased shareholder payouts every year since the start of the millennium, aside from a technical blip in 2017 when a change in payment frequency interrupted the growth record.

British American Tobacco shares dip

Smoking rates have dropped sharply across Western markets because of well-known health risks. British American Tobacco has managed to withstand that decline by positioning itself as a formidable income engine.

Today the shares offer a trailing dividend yield of 5.6%. Forecasts suggest that could rise to 5.87% in 2026 and 6.07% in 2027. That highlights the attraction of top dividend income stocks. They don’t just offer generous yields but typically aim to lift shareholder payouts steadily over time, potentially giving investors a high and rising income.

The pace of growth has slowed though. Over the last 15 years, shareholder payouts have grown at a compound annual rate of 4.5%. Over the past three years that figure has slipped to about 2%. Given the relatively high starting yield, that won’t worry investors too much.

Stock resilience

As well as income, British American Tobacco has delivered plenty of share price growth. The shares have climbed 86% over the last two years and around 38% over 12 months. Dividends are on top.

It’s slipped about 7.7% in the past turbulent week though, roughly in line with the wider market sell-off. I thought it might have held more steady than that, given that global conflict seems unlikely to have a direct impact on cigarette demand.

Investors have also been digesting 2025 full-year results released on 12 February, with revenue edging down 1% to £25.6bn. On a constant currency basis it actually rose 2.1%.

The company’s newer product lines continue to expand at a faster pace. Revenue from these categories climbed 7% to £3.62bn and their contribution to profit jumped 77% to £442m. Cash generation remains strong and the board confirmed a £1.3bn share buyback for 2026.

Long-term outlook

There are still long-term risks. Global smoking rates continue to fall and regulation is tightening, particularly around vaping products and related alternatives. After such a strong share price run, some cooling wouldn’t be surprising either. Continued market volatility could also inflict more short-term damage.

Big Tobacco isn’t for everybody, but it has a long history of rewarding patient shareholders. Growth may slow from here, but the recent pullback slightly reduces the valuation risk. British American Tobacco is worth considering in today’s uncertainty. The FTSE 100 currently offers plenty of battered names, so opportunities are popping up across the index. I don’t buy tobacco stocks myself, so I’ll be targeting one or two of those instead.