Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cigarette specialist Lorillard
With that in mind, let's take a closer look at Lorillard's business and see what CAPS investors are saying about the stock right now.
|Headquarters (founded)||Greensboro, N.C. (1760)|
|Market Cap||$12.75 billion|
|Trailing-12-Month Revenue||$3.96 billion|
CEO Murray Kessler
CFO David Taylor
|Return on Assets (average, past 3 years)||36.5%|
|Cash/Debt||$2.1 billion / $1.8 billion|
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
Earlier this year, harleytodd brought Lorillard's magical qualities to our community's attention: "Magic Formula stock. Strong balance sheet and nice yield. Smoking is not going away so we might as well profit from it."
Lorillard's dominant Newport brand, which owns 35% of the menthol market, continues to provide the company with a clear competitive edge. Due in large part to Newport's premium pricing, Lorillard's three-year average operating margin (44%) is higher than that of rivals Altria (35.4%) and Reynolds American (29.6%), as well as foreign players Philip Morris International
CAPS member dsp444 elaborates on the Lorillard bull case:
Its still on the Magic Formula screen, so I might choose to hang on for another year. Earnings and cash flows have been pretty solid. Has a large cash hoard, but in the last year took on a lot of debt, which actually drops the company book value negative. Seems to offer very good returns on investments and high margins. Its hard to pass all that up while collecting a solid dividend.
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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Philip Morris is a Motley Fool Global Gains pick. The Fool owns shares of Philip Morris and Altria. Try any of our Foolish newsletter services free for 30 days.
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