Vector Group (VGR) and Reynolds American (RAI) Financial Contrast
Vector Group (NYSE: VGR) and Reynolds American (NYSE:RAI) are both mid-cap consumer staples companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitabiliy, analyst recommendations and dividends.
This table compares Vector Group and Reynolds American’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
47.0% of Vector Group shares are owned by institutional investors. Comparatively, 46.4% of Reynolds American shares are owned by institutional investors. 12.9% of Vector Group shares are owned by insiders. Comparatively, 0.1% of Reynolds American shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Vector Group pays an annual dividend of $1.60 per share and has a dividend yield of 7.6%. Reynolds American pays an annual dividend of $2.04 per share and has a dividend yield of 3.1%. Vector Group pays out 420.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Reynolds American pays out 88.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Reynolds American has increased its dividend for 7 consecutive years.
Risk & Volatility
Vector Group has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500. Comparatively, Reynolds American has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500.
This is a summary of current ratings and target prices for Vector Group and Reynolds American, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Vector Group presently has a consensus target price of $27.00, suggesting a potential upside of 28.63%. Reynolds American has a consensus target price of $58.25, suggesting a potential downside of 10.21%. Given Vector Group’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Vector Group is more favorable than Reynolds American.
Valuation and Earnings
This table compares Vector Group and Reynolds American’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Vector Group||$1.28 billion||2.12||$291.57 million||$0.38||55.17|
|Reynolds American||$12.54 billion||7.38||$6.07 billion||$2.31||28.08|
Reynolds American has higher revenue and earnings than Vector Group. Reynolds American is trading at a lower price-to-earnings ratio than Vector Group, indicating that it is currently the more affordable of the two stocks.
Reynolds American beats Vector Group on 9 of the 16 factors compared between the two stocks.
Vector Group Company Profile
Vector Group Ltd. is a holding company. The Company is engaged in the manufacture and sale of cigarettes in the United States through its Liggett Group LLC (Liggett) and Vector Tobacco Inc. (Vector Tobacco) subsidiaries, and the real estate business through its New Valley LLC subsidiary, which is seeking to acquire or invest in additional real estate properties or projects. The Company’s segments include 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 the Company’s investments in New Valley LLC. The Company owns and seeks to acquire investment interests in a range of domestic and international real estate projects through debt and equity investments.
Reynolds American Company Profile
Reynolds American Inc. (RAI) is a holding company. The Company’s segments include RJR Tobacco, which consists of the primary operations of its subsidiary, R. J. Reynolds Tobacco Company; Santa Fe, which consists of the primary operations of its subsidiary, Santa Fe Natural Tobacco Company, Inc., and American Snuff, which consists of the primary operations of its subsidiary, American Snuff Company, LLC. The RJR Tobacco segment manages contract manufacturing of cigarettes and tobacco products through arrangements with British American Tobacco p.l.c. affiliates, and manages the export of tobacco products to certain United States territories, the United States duty-free shops and the United States overseas military bases. The American Snuff segment offers adult tobacco consumers a range of segregated smokeless tobacco products, primarily moist snuff. The Santa Fe segment manufactures and markets super-premium cigarettes and other tobacco products under the NATURAL AMERICAN SPIRIT brand.
Receive News & Ratings for Vector Group Ltd. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Vector Group Ltd. and related companies with MarketBeat.com's FREE daily email newsletter.