Is this the best part of FTSE 100 dividends?

Like many investors, I appreciate a good participation of blue chip income hidden in my portfolio, silently generating passive income flows year after year. One Ftse 100 Share Io Dio has a star history when it comes to dividends.

Could it be the best FTSE 100 participation for an income investor to consider?

High performance but a history of mixed shares prices

The participation in question is American British tobacco (LSE: bats). Its dividend yield is 7.5%.

That is some distance from being the greatest performance in the FTSE 100 index. Phoenix Cluster (LSE: PHNX) produces 9.2% and this week announced another increase in its annual dividend per share.

Even so, British American's performance places it among the highest performance in the index, even if it is not the upper part of the Board. With a yield of 7.5%, £ 20k ​​invested today with luck would earn an £ 1,500 investor in passive income annually.

Exceptional dividend growth emerge

Actually, passive income could be even greater than 1,500 every year.

The British American has increased his dividend by action annually for decades. He has promised to continue doing so. As dividends are key to the investment case, I believe that the Board sees that this progressive dividend policy is of primary importance.

Some other members of FTSE 100, such as Diageo and ESPIRAX, They have longer gusts of annual dividend growth. But, again, British American is among the best performance actions of the index on this metric. Phoenix, by the way, has increased its dividend in each of the last years, but has cut it less than a decade ago.

Long -term mixed income perspectives

No dividend is guaranteed to last.

While British American history of regular annual increases is impressive, it is not necessarily indicative of what to expect in the future.

The business is very generative in cash. British American has premium brands as Fortunate strike that give pricing power. The addictive nature of nicotine also means that the British American has pricing power. It also has other strengths, including a global distribution network.

But here there is a great warning: the demand for cigarettes is decreasing in many markets. While products that are not of non -figures, such as vapes, can help British to compensate that to some extent, the long -term volume perspective remains without being clear, as well as the question of whether the gain margins can approach anything close, much less coincide with those of cigarettes.

Income participation to consider, with risks

That matters because it could affect cash flows in the FTSE 100 company.

If that happens, it could mean that the dividend is reviewed. Rival Imperial brands He cut his payment per share in 2020. The British American could still be forced to do the same at some point in the future.

So, although its performance and dividend growth registration put it at the upper level of the FTSE 100 dividend shares in what is concerned, here there are significant risks.

Based on that, I don't think British American is definitely the better Participation of dividends in the FTSE 100.

One of the best? Maybe.

I see significant attractions. I still see this as a part of the investors focused on the entry of shares they should consider.