Published on April 22nd, 2015 | by Daily Station Team
Factors to Consider Before Making an Investment in Vector Group
The Vector Group has a reputation for their subsidiaries, especially the tobacco company, the Ligget Group. Everyone knows that tobacco has low input costs and results in an addictive product that is, nevertheless, used widely by everyone from the masses to bureaucrats. While many have moral qualms when it comes to investing in tobacco companies due to ethical issues, that doesn’t alter the fact that tobacco companies are a safe bet for investors.
However, investors need to be aware of a few factors before they invest in the Vector Group, despite the fact that it is considered the most trustworthy group in America. The Vector Group gives all its shareholders health cash and stock dividends. Quarterly stock dividends aren’t something the company offers since they are taxed by the IRS. The Vector Group offers yearly dividends instead, and those are at a healthy level.
For shareholders that have the patience to hang around for the long run, they will receive an extra share per day, so if one has 1,000 shares today, the next morning they will wake up with 1,050. The company has increased their dividends from 7.2 percent to 12.2 percent.
Despite this, the Vector Group still requires cash to pay those cash dividends and over the past few years, the company has been having issues in achieving sustainable cash flow.
They spend it one way or another, which means that the Vector Group’s cash dividend isn’t necessarily a certain anymore. Thus, before putting their money in, investors should look at every angle of the Vector Group. The loopholes in the company’s balance sheet need to be analyzed before a move is made. However, the group shouldn’t be underestimated because Forbes has vouched for it and investors throughout the country favor it.
It owns a number of subsidiaries, with the Ligget Group being the most famous. If anyone has any moral qualms about investing in tobacco, they should understand that it’s just business. Tobacco companies are able to offer healthy returns due to the low input costs and high production rates. Plus, the addictive nature of the product doesn’t hurt. However, any investor who has a serious interest in the Vector Group needs to take into account their behavior. Investors should take the time to study the company’s history in-depth.
They can then decide whether to stick around for the dividends for an entire year. Investors who want to obtain a quick return are barking up the wrong tree with Vector Group. However, the Vector Group isn’t looking for investors who only want to generate a quick return, so they don’t mind if these investors disappear after a quarter or two. The Vector Group is a force of nature on the stock market. All it needs to do, though, is making itself more attractive to investors so they buy and hang on to the stock for the long-run. Well, if that is what the group is looking for, of course.