I’d avoid this 8.2% dividend share and buy this FTSE 100 stock instead!

first_img Image source: Getty Images Our 6 ‘Best Buys Now’ Shares Simply click below to discover how you can take advantage of this. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Shares in FTSE 100 tobacco giant British American Tobacco (LSE: BATS) are firmly in negative territory today. Should I take this as an opportunity to buy or a signal to seek out alternative blue-chip stocks? I’m inclined to think the latter, even if today’s full-year results were far from awful.Less puff, more profitToday, British American Tobacco revealed a 2.8% rise in revenue from its combustible products, thanks to a fall in volume being offset by higher prices. Adjusted profit from operations puffed 4.8% higher and £660m in cost savings was also announced.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…By far the most interesting part of today’s report for me however, was the rise in the number of people consuming the firm’s non-combustible products. This climbed 3m to 13.5m over the year. The FTSE 100 titan now believes it can increase this number to 50m by 2030. Looking ahead, BAT also said global tobacco industry volume was expected to shrink 3% in 2021. More encouragingly, it still expects constant currency revenue growth of between 3-5%.All told, I’d say today’s statement was pretty positive. Notwithstanding this, I wouldn’t be queuing up to buy the shares. FTSE 100 value trap?For me, BAT remains a ‘Marmite’ stock. On the one hand, you’ve a global player in an industry that’s practically immune from new entrants. It’s also been a consistent winner from an income perspective. Today’s 2.5% increase to the dividend means the firm will now return a total of 215.6p per share to holders. That gives a staggering trailing yield of 8.2%, reasonably covered by profits. Analysts are forecasting another rise to dividend next year too!On the other hand, the BAT performance over the last few years leaves a lot to be desired. The shares are now worth roughly half what they were in the middle of 2017 and trade on a P/E of 8. That’s indicative of a value trap, in my opinion. Other potential negatives include the possibility of new revelations regarding vaping safety (or lack of) and the sizeable amount of debt on its balance sheet. It goes without saying that prospective investors also need to be comfortable about owning a company selling addictive products.Taking all this into account, I believe there are better options in the FTSE 100. One of these, in my opinion, is BAE Systems (LSE: BA). Consistent income From an income perspective, the FTSE 100 defence giant is equally attractive. Having now reinstated its dividend, the company is expected to return 23.5p per share for FY20. This gives a yield of 4.9% at the current share price. Another boost to BAE’s income credentials is that it has consistently raised its payouts over the years. This is something I particularly look for when screening dividend stocks. A good-but-not-excessive, gently increasing cash return is more desirable to one that barely moves year-on-year.This isn’t to say BAE will suit all investors. From an ethical point of view, it can arguably be placed in the same group of ‘sin’ stocks as BAT. Moreover, the share price has hardly set the world on fire recently.  See all posts by Paul Summers I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!center_img Paul Summers | Wednesday, 17th February, 2021 | More on: BA BATS Enter Your Email Address Despite this, I’m confident the ongoing need for nations to protect themselves, particularly in areas such as cybersecurity, makes BAE a solid long-term hold. Full-year results are due on 25 February. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. “This Stock Could Be Like Buying Amazon in 1997” I’d avoid this 8.2% dividend share and buy this FTSE 100 stock instead!last_img read more