Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cigarette manufacturer Vector Group (NYSE: VGR) has received a distressing two-star ranking.
With that in mind, let's take a closer look at Vector's business and see what CAPS investors are saying about the stock right now.
Vector facts
| Headquarters (Founded) | Miami (1873) |
| Market Cap | $1.4 billion |
| Industry | Tobacco |
| Trailing-12-Month Revenue | $580.7 million |
| Management | CEO Howard Lorber CFO J. Bryant Kirkland III |
| Return on Capital (Average, Past 3 Years) | 21.5% |
| Cash/Debt | $276.9 million / $540.3 million |
| Dividend Yield | 9.3% |
| Competitors |
Lorillard Philip Morris USA Reynolds American |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 10% of the 77 All-Star members who have rated Vector believe the stock will underperform the S&P 500 going forward.
Just yesterday, one of those Fools, TerryHogan, succinctly summed up the Vector bear case for our community:
1. Dividend looks unsustainable. 2. They're not "sticking to their knitting" -- see hedge fund and real estate investments. 3. Don't like the cigarette business long-term (Altria notwithstanding). 4. If you're going to be in cigarettes, be in a good brand, and be in China. 5. Huge debt balloon due in 2015, and the rates on it are ridiculous (11%!) 6. Declining revenue, with no concomitant reduction in administrative expense.
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