Today's resilient but slow-growth nature of the tobacco industry has made it a specialty niche for dividend investors. Where else can you routinely find massive-yield dividend stocks like British American Tobacco (NYSE: BTI), which offers an 8.7% yield at its current price?

But these high yields can sometimes be a trap, a sign that Wall Street sees risk and wants to be compensated accordingly to own the stock. So, where does British American Tobacco fall? Is its hefty dividend trustworthy? Is the stock a buy, sell, or hold? Here is what you need to know.

In most cases, the dividend is the primary reason for owning tobacco stocks, so it's a great place to start. British American Tobacco, or BAT, pays a hefty dividend that yields over 8% at its current share price. That's huge because if you understand that the S 500 has historically averaged annualized returns between 9% and 10%, that dividend establishes a high floor for investment returns.

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Source Fool.com