Vector Group Ltd. (NYSE:VGR)

CAPS Rating: 2 out of 5

A holding company which is engaged in the manufacture and sale of cigarettes in the U.S., development and marketing of the low nicotine and nicotine-free QUEST cigarette products and real estate business through its subsidiaries.


Player Avatar NovaTodd (25.69) Submitted: 5/10/2013 2:35:23 PM : Underperform Start Price: $13.99 VGR Score: -22.38

This company has been paying out a dividend that exceeds free cash flow for five years now. There has also been a consistent trend of dilution that has been eroding existing shareholder's value. Herbert Stein's dictum that "if something cannot go on forever, it will stop" is probably relevant here. I'm betting on a dividend cut at some point which will likely send shares tumbling.

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