Why a dependable FTSE 100 dividend stock is making its owner consider selling

# The position British American Tobacco (LSE: BATS) is the author's top-earning holding for a second income portfolio. It delivers a steady cash stream: the company declared a 245.04p dividend for 2025, paid in four equal instalments of 61.26p. At the 24 September closing price of 4,243p, that equates to a yield just below 6%.

# Why the stock looks attractive On conventional income metrics the case is clear. A near-6% yield and a history of regular quarterly payments suit investors targeting a second income. The company reports a long record of rising payouts: average dividend growth of 4.5% over the last 15 years.

The latest operational figures don't force a sell decision either. Adjusted diluted earnings per share rose 7.9% in the first half of 2026 after adjustments including the Canadian business. That adjusted improvement supports the idea that the dividend story remains intact.

# Why the owner is thinking of selling Two sets of issues inform the author's doubt: ethical discomfort and business risk.

There is also a notable divergence between reported and adjusted results. Reported EPS fell 28.6% while adjusted diluted EPS rose 7.9% in H1 2026. That gap is a reminder to scrutinise headline numbers and assess what adjustments mean for sustainable cash flow and dividend cover.

# Practical decision points for income investors If you own or are considering BATS for a second income, here are concrete factors to weigh:

• Cash yield vs conviction: A near-6% yield is attractive, but match that income to your comfort level with the company's products.
• Dividend track record: The company has grown payouts on average 4.5% over 15 years, which supports income reliability—but past growth doesn't guarantee future increases.
• Earnings quality: Investigate the drivers behind adjusted vs reported EPS. Are adjustments one-offs or recurring? How do they affect dividend coverage?
• Regulatory trajectory: Monitor policy developments in key markets and any litigation or taxation changes that could hit sales.

• Exit plan: If ethical concerns matter, decide whether to sell gradually or in one action and where to redeploy the capital—other FTSE dividend names, a diversified income fund, or cash.

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