Vector Group (NYSE:VGR) - Share price, News & Analysis

VGR fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	2/6
Past Performance	2/6
Financial Health	1/6
Dividends	4/6

VGR Stock Overview

Vector Group Ltd., through its subsidiaries, manufactures and sells cigarettes in the United States.

Rewards

Trading at 71.4% below our estimate of its fair value

Revenue is forecast to grow 21.59% per year

Earnings have grown 26.6% per year over the past 5 years

Risk Analysis

Debt is not well covered by operating cash flow

Negative shareholders equity

Unstable dividend track record

Significant insider selling over the past 3 months

Vector Group Competitors

22nd Century Group

NasdaqCM:XXII

US$279.7m

Price History & Performance

Summary of all time highs, changes and price drops for Vector Group
Historical stock prices
Current Share Price	US$11.92
52 Week High	US$17.39
52 Week Low	US$10.03
Beta	0.94
1 Month Change	-8.52%
3 Month Change	7.68%
1 Year Change	-17.39%
3 Year Change	39.69%
5 Year Change	-36.38%
Change since IPO	220.08%

Recent News & Updates

Apr 20

Vector Group: Dividend Safety Looking Thin Without Douglas Elliman

Vector Group completed their Douglas Elliman spin-off at the end of 2021, thereby making their company tobacco-focused. Whilst tobacco is economically resilient, the loss of their Douglas Elliman operating cash flow makes the outlook for their dividend coverage worse and likely to see thin coverage at best. This spin-off also saw their cash balance decrease considerably more than their debt, thereby pushing their leverage higher. When utilizing their estimated underlying residual operating cash flow following their spin-off, it now appears that their leverage will be very high. These variables are toxic for dividend safety, which offsets the desirability of their high yield and thus I believe that maintaining my hold rating is appropriate.

Shareholder Returns

	VGR	US Tobacco	US Market
7D	-4.4%	-7.7%	-4.0%
1Y	-17.4%	-75.5%	-13.2%

Return vs Industry: VGR exceeded the US Tobacco industry which returned -75.1% over the past year.

Return vs Market: VGR underperformed the US Market which returned -12.3% over the past year.

Price Volatility

Is VGR's price volatile compared to industry and market?
VGR volatility
VGR Average Weekly Movement	7.9%
Tobacco Industry Average Movement	15.2%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: VGR is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: VGR's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1873	500	Howard Lorber	https://www.vectorgroupltd.com

Vector Group Ltd., through its subsidiaries, manufactures and sells cigarettes in the United States. It operates in two segments, Tobacco and Real Estate. The company produces cigarettes in 100 combinations under the EAGLE 20’s, Pyramid, Montego, Grand Prix, Liggett Select, Eve, and USA brand names, as well as various partner and private label brands.

Vector Group Fundamentals Summary

How do Vector Group's earnings and revenue compare to its market cap?
VGR fundamental statistics
Market Cap	US$1.85b
Earnings (TTM)	US$152.08m
Revenue (TTM)	US$808.69m

12.1x

P/E Ratio

2.3x

P/S Ratio

Is VGR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
VGR income statement (TTM)
Revenue	US$808.69m
Cost of Revenue	US$364.39m
Gross Profit	US$444.30m
Other Expenses	US$292.23m
Earnings	US$152.08m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.98
Gross Margin	54.94%
Net Profit Margin	18.81%
Debt/Equity Ratio	-166.5%

How did VGR perform over the long term?

See historical performance and comparison

Dividends

6.7%

Current Dividend Yield

80%

Payout Ratio

Valuation

Is Vector Group undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: VGR ($11.92) is trading below our estimate of fair value ($41.63)

Significantly Below Fair Value: VGR is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: VGR's Price-To-Earnings Ratio (12.1x) is in line with the Global Tobacco industry average.

PE vs Market: VGR is good value based on its Price-To-Earnings Ratio (12.1x) compared to the US market (15.1x).

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate VGR's PEG Ratio to determine if it is good value.

Price to Book Ratio

PB vs Industry: VGR has negative assets, so we can't compare its Price-To-Book Ratio to the US Tobacco industry average.

Future Growth

How is Vector Group forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

21.6%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if VGR's forecast earnings growth is above the savings rate (1.9%).

Earnings vs Market: Insufficient data to determine if VGR's earnings are forecast to grow faster than the US market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: VGR's revenue (21.6% per year) is forecast to grow faster than the US market (7.8% per year).

High Growth Revenue: VGR's revenue (21.6% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if VGR's Return on Equity is forecast to be high in 3 years time

Past Performance

How has Vector Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

26.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: VGR has high quality earnings.

Growing Profit Margin: VGR's current net profit margins (18.8%) are lower than last year (24.9%).

Past Earnings Growth Analysis

Earnings Trend: VGR's earnings have grown significantly by 26.6% per year over the past 5 years.

Accelerating Growth: VGR's earnings growth over the past year (2.1%) is below its 5-year average (26.6% per year).

Earnings vs Industry: VGR earnings growth over the past year (2.1%) underperformed the Tobacco industry 9.4%.

Return on Equity

High ROE: VGR's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.

Financial Health

How is Vector Group's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: VGR has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: VGR has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.

Debt to Equity History and Analysis

Debt Level: VGR has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: VGR's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: VGR's debt is not well covered by operating cash flow (18%).

Interest Coverage: VGR's interest payments on its debt are well covered by EBIT (3.2x coverage).

Balance Sheet

Dividend

What is Vector Group current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

6.71%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: VGR's dividend (6.71%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: VGR's dividend (6.71%) is in the top 25% of dividend payers in the US market (4.05%)

Stability and Growth of Payments

Stable Dividend: VGR's dividend payments have been volatile in the past 10 years.

Growing Dividend: VGR's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (80.2%), VGR's payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (51.9%), VGR's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure

CEO

Howard Lorber (72 yo)

21.33yrs

Tenure

US$17,871,658

Compensation

Mr. Howard M. Lorber serves as Chairman, President and Chief Executive Officer of Douglas Elliman Inc. since December 2021. Mr. Lorber serves as Executive Chairman of its subsidiary Douglas Elliman Realty,...

CEO Compensation Analysis

Compensation vs Market: Howard's total compensation ($USD17.87M) is above average for companies of similar size in the US market ($USD5.43M).

Compensation vs Earnings: Howard's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: VGR's management team is considered experienced (2.3 years average tenure).

Board Members

Experienced Board: VGR's board of directors are seasoned and experienced ( 14.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: VGR insiders have sold more shares than they have bought in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/24 00:00
End of Day Share Price	2022/05/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31