Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cigarette maker Reynolds American (NYSE: RAI ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Reynolds' business and see what CAPS investors are saying about the stock right now.
||Winston-Salem, N.C. (1875)
President/CEO Daniel Delen (since March 2011)
Vice President/CFO Thomas Adams (since January 2008)
|Return on Equity (Average, Past 3 Years)
||$3 billion / $4.1 billion
Altria (NYSE: MO )
Philip Morris International (NYSE: PM )
Vector Group (NYSE: VGR )
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 93% of the 581 members who have rated Reynolds believe the stock will outperform the S&P 500 going forward. These bulls include trooper999 and All-Star Staka, who is ranked in the top 2% of our community.
Just last month, trooper999 tapped Reynolds as a solid income opportunity: "Dividend play. A Good [return on invested capital] gives them a good chance to maintain this dividend as earnings slow. They are a little expensive but the next few years will be about dividends."
Currently, Reynolds even sports a cheapish EV/EBITDA ratio 8.6. That represents a discount to other cigarette stocks like Altria (9.7), Philip Morris (11.3), and Vector Group (11.6).
CAPS All-Star Staka offers a balanced look at Reynolds:
- Blue chip with a solid dividend
- Defensive (just in case everybody is wrong with their positive economic outlooks)
- Popular brands, lots of moat
- The usual litigation thing
- Danger of more restrictive political actions
What do you think about Reynolds, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!