British American Tobacco PLC (ADR) (BTI), Tesco PLC (TSCO), Severn Trent Plc (SVT): 3 More Blue-Chip Dividend Bargains

LONDON — The FTSE 100 has put the “Summer Sale Now On!” signs up. The index has fallen 8% from its recent high, and I’ve been rummaging through the clearance section looking for some blue-chip dividend bargains.

Some companies’ shares have fallen more heavily than the index, but at the same time, the City consensus on their forecast dividends has risen. The combination of a lower share price and a higher dividend means you’re getting much more income bang for your buck than just a few weeks ago.

British American Tobacco PLC (ADR) (NYSEAMEX:BTI)

British American Tobacco PLC (ADR) (NYSEAMEX:BTI), Tesco PLC (LON:TSCO), and Severn Trent Plc (LON:SVT) fit the bill, and the table below gives the low-down on them.

Company Recent Share-Price High Current Share Price Change Forecast Dividend One Month Ago Current Forecast Dividend Current Forecast Yield
British American Tobacco PLC (ADR) (NYSEAMEX:BTI) 3,807 pence 3,469 pence (9%) 149.59 pence 149.61 pence 4.3%
Tesco 388 pence 337 pence (13%) 15.10 pence 15.16 pence 4.5%
Severn Trent 2,200 pence 1760 pence (20%) 80.34 pence 80.37 pence 4.6%

British American Tobacco PLC (ADR) (NYSEAMEX:BTI)
The shares of British American Tobacco PLC (ADR) (NYSEAMEX:BTI), the world’s second-largest tobacco company, don’t tend to track the wilder gyrations of the stock market. The owner of global top-10 cigarette brands Dunhill and Lucky Strike is known as one of the “Steady Eddies” of the FTSE 100.

However, the recent downswing has seen BAT’s (LSE:BATS) shares drop with the market and then some. As a result, the company’s forecast dividend yield has risen to 4.3% — a full percentage point higher than the market average. I’d say 4.3% isn’t a bad starting income for a company that has grown its dividend by double digits for the past five years and is forecast to continue doing so.

Tesco
I have to admit that I didn’t go along with the general Foolish wisdom that Tesco PLC (LON:TSCO) was a good bet after its shares were hammered by a profit warning some 18 months ago. My view was thatTesco PLC (LON:TSCO)’s problems are more deep-rooted than many fans would like to believe and that struggling supermarkets take an awful long time to turn around. As such, I felt my money could be more profitably employed elsewhere.

Having said that, if you believe in Tesco PLC (LON:TSCO)’s long-term future and are prepared to tough it out, the shares have dropped 13% from their recent high — they began falling a week or so before unimpressive first-quarter results announced on June 5 — and are now yielding a forecast 4.5%.