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The risks are rising for this 7%-yielding FTSE 100 dividend stock! Should you still buy it for 2020?

British American Tobacco (LSE: BATS) is a FTSE 100 share whose strength in 2019 gives me reason to fear, rather than relish, what could be in store in the new year.

The Lucky Strike and Dunhill manufacturer has jumped 30% in value since January 1, a rise which comes despite growing health concerns over vaping products and a subsequent rise in the restriction in the sale and usage of these technologies. And particularly so in the critical US marketplace.

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Vaping woes

Underlining these pressures, British American Tobacco said late last month it expected sales growth from its next-generation products, like its Vype e-cigaratte, to come in “at the lower end of our range of 30-50%” at constant currencies in 2019.

It confirmed this reflected “the slowdown in the US vapour market,” a territory in which the number of cases of lung disease reportedly linked to vaping products continues to balloon.

The Footsie firm said that, excluding the impact of the cooling US region, revenues at stable exchange rates would come in at around the mid-point of the range. Though I reckon it could be a little optimistic to expect sales to hold up in other major global markets as health concerns rise all over the planet (India has just put out a total ban on e-cigarettes, while other major markets such as Brazil, Singapore and Japan have also introduced significant restrictions).

More reason to worry

2019 may have been the year when newsflow surrounding the future of the e-cigarette dominated investor sentiment towards Big Tobacco. But in what could be glibly considered a ‘blast from the past’, the World Health Organisation popped up last week with a report that suggested a major sea change in the usage of British American Tobacco’s traditional combustible products too.

In what the body describes as a “turning point in the fight against tobacco,” its predictions suggest the number of male smokers worldwide is about to fall for the first time in history.

It expects that the number will dip to 1.091bn in 2020, from 1.093bn last year, and will keep edging down to reach 1.087bn by 2025, a trend which the WHO says has been “driven by governments being tougher on the tobacco industry.”

This is significant as the steady decline in cigarette demand has been underpinned by women quitting traditional tobacco products, down around 100m since 2000. Conversely the number of men maintaining or taking up the habit has grown by around 40m over the same period.

Males account for more than 80% of all tobacco product sales, and so signs that thinking around the subject from this critical demographic is also changing adds an extra major worry for the likes of British American Tobacco.

It therefore matters little to me this FTSE 100 firm trades on a low P/E ratio of 9.4 times for 2020 and carries a huge 7% dividend yield too. The risks to its long-term future continue to grow at an alarming rate and I’d rather put my hard-earned investment cash to work elsewhere.

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Royston Wild 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.