Why Vector Group Is Poised to Underperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cigarette maker Vector Group (NYSE: VGR  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Vector and see what CAPS investors are saying about the stock right now.

Vector facts

Headquarters (Founded)

Miami (1911)

Market Cap

$1.5 billion

Industry

Tobacco

Trailing-12-Month Revenue

$563.2 million

Management

CEO Howard Lorber

CFO Bryant Kirkland

Return on Capital (Average, Past 3 Years)

21.3%

Cash/Debt

$415.9 million / $672.3 million

Dividend Yield

10%

Competitors

Lorillard (NYSE: LO  )
Reynolds American
(NYSE: RAI  )

Sources: S&P Capital IQ and Motley Fool CAPS.

Just yesterday, CAPS member rknapton succinctly summed up the Vector bear case for our community:

Short. Cigarette manufacturer and seller is going to face headwinds obviously. Looks like mostly [U.S. operations] so especially here. Revs have stopped growing, earnings have been declining and they have quite a bit of debt. And why the heck are they issuing a ton of debt to finance a 10% dividend. Stupid. Not to mention insiders know this and sold over a million shares.

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