My funding portfolio is designed round a technique that features a 20-to-30-year outlook. This performs an vital position in what I search for when figuring out dividend shares to purchase, as a result of they should exhibit long-term resilience.
Nonetheless, even essentially the most established corporations face challenges and surprising headwinds as time passes. This necessitates an occasional reassessment of my portfolio to make sure the long-term holdings are nonetheless viable.
Two that I’m in the present day are British American Tobacco (LSE: BATS) and MONY Group (LSE:MONY).
British American Tobacco
British American Tobacco was based in 1902 and sells cigarettes, vapour, heated and fashionable oral merchandise, together with Vuse, glo and Velo. Its scale is substantial: the corporate profile information 47,797 workers and operations throughout a number of areas.
That attain issues as a result of weaker cigarette volumes in a single market needn’t translate instantly into falling group money circulate.
The newest figures definitely assist reinforce my conviction – for 2025, income was £25.61bn, working revenue £9.997bn and free money circulate £4.362bn.
Key metrics:
- Share value: 4,154p
- Market cap: £89.6bn
- Worth-to-earnings (P/E) ratio: 14.36
- Trailing dividend yield: 6%
These are first rate numbers, however they don’t overshadow the elephants within the room: the moral difficulty and likewise the ‘less-harmful’ transition.
Cigarettes stay the core money driver however regulation, taxation, and altering behaviour add structural dangers. ‘Subsequent-gen’ merchandise like vapes add promise for the longer term, however competitors, regulation and execution danger are excessive.
I nonetheless see the revenue potential to think about with this one, but it surely’s now not the set-and-forget development and revenue gem it as soon as was. Can administration change misplaced flamable income with out weakening the steadiness sheet or dividend? Solely time will inform.
MONY Group
MONY Group is a wholly completely different beast. The digital platform helps folks lower your expenses, with divisions together with Cash, Insurance coverage, Journey, Residence Providers and MoneySavingExpert. Based in 1993, the group has remained a small outfit with fewer than 1,000 workers.
Its mannequin is much less capital-intensive than tobacco manufacturing: it attracts customers, compares gives and earns income from business relationships.
The newest 2025 figures present a smaller enterprise with sturdy money conversion:
- Share value: 210p
- Market cap: £1.06bn
- Income: £446.3m (up from £439.2m)
- Working revenue: £117.4m (up from £113.3m)
- Free money circulate: £104.1m (up from £101m)
Valuation-wise, its P/E ratio is average at 13.51 and its trailing dividend yield stays enticing at 6.13%.
For a 20-to-30-year portfolio, it gives publicity to digital client finance and trusted manufacturers. Nonetheless, comparability web sites face stiff competitors, regulation and altering search economics.
The corporate should maintain attracting customers and turning consideration into worthwhile transactions. That makes it extra growth-sensitive than British American, and probably extra weak to a poor strategic determination.
My conclusion
I believe each shares nonetheless have adequate long-term revenue potential and deserve a better look. However I gained’t say both is a ‘high’ choose. Regulatory headwinds threaten cigarette makers, whereas MONY Group’s future is dependent upon remaining related in a aggressive market. That’s why diversification is essential.
For traders contemplating new revenue shares, at all times look intently at dividend cowl, debt, buyer developments and administration steering.
For me, the choice isn’t merely yield versus development. It’s whether or not a enterprise can navigate the surprising twists and turns that inevitably lie forward. That’s the actual query long-term traders should maintain asking, 12 months after 12 months.
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Mark Hartley owns shares in MONY Group and British American Tobacco.
