Our analysis is based on comparing Vector Group Ltd. with the following peers – Philip Morris International Inc., Altria Group, Inc., British American Tobacco PLC Sponsored ADR, Rock Creek Pharmaceuticals, Inc. and 22nd Century Group, Inc. (PM-US, MO-US, BTI-US, RCPIQ-US and XXII-US).
Vector Group Ltd.’s dividend yield is 8.74 percent and its dividend payout is 461.76 percent. This compares to a peer median dividend yield of 3.40 percent and a payout level of 31.75 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s relatively low dividend quality score of 33 out of a possible score of 100 raises questions on the sustainability of its robust payout ratio.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2017), VGR-US paid a low quality dividend, which represents a yield of 6.86% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 3 were medium quality and 2 were low quality.
- The ending cash balance, with a dividend coverage of 2.68x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
Quadrant label definitions. Hover to know more
Over the last twelve months (prior to September 30, 2017), VGR-US paid a low quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 1.03x), investing cash flow (coverage of -0.39x), issuance cash flow (coverage of 0.13x) and twelve-month prior cash (coverage of 2.98x), for a total dividend coverage of 3.68x.
VGR-US’s issuance cash flow includes outflows from net debt repayment (coverage of -0.07x).
These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.
|Dividend Yield (%)||9.77||9.07||6.86||6.44||6.85||8.74|
|Dividend Payout (%)||462.81||376.32||440.88||335.43||280.52||461.76|
A complete list of metrics and analysis is available on the company page.
Vector Group Ltd. operates as a holding company, which manufactures and sells tobacco products. It operates through the following segments: Tobacco, E-Cigarettes and Real Estate. The Tobacco segment consists of the manufacture and sale of cigarettes. The E-Cigarettes segment includes the operations of the company’s e-cigarette business. The Real Estate segment includes investments in consolidated and non-consolidated real estate businesses. The company is headquartered in Miami, FL.
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