Reynolds American (
) is trying to make up for lost revenue in its cigarette business
by creating new products (some aimed at women), shifting to
premium brands and introducing smokeless alternatives, like
It recently announced Vuse, an e-cigarette that uses smart
technology to regulate the power, heat and cartridge performance
that is supposed to deliver the perfect puff every time.
It manufactures some of the industry's best known brands,
including Camel, Pall Mall, Winston and Kool, along with Doral
Through subsidiaries, it also makes snuff and roll-your-own
The Winston-Salem, N.C.-based company has grown earnings per
share for three straight years. Analysts are looking for 9%
growth this year and 6% next.
In the past two quarters, earnings have grown 6% and 9%.
Analysts are forecasting 7% growth to 81 cents a share in the
Revenue growth has been flat lately. Out of the last 18
quarters, revenue has declined nine times. In the past two
quarters, it was flat and grew 1%.
It has a five-year Earnings Stability Factor of 2 on a scale
of 0 to 99 where low numbers correspond to stable earnings
growth. It has a Relative Price Strength Rating of 55, meaning it
has performed slightly better than the S&P 500 over the past
The dividend is 63 cents a quarter, which works out to a yield
of 4.9%. The company has offered a dividend for 37 straight
quarters going back to its IPO in 2004.
Since then, it has increased its dividend all the way from
23.75 cents, up 165%.
It has a return on equity of 29% and pretax margins of 32%. It
carries a long-term debt-to-equity ratio of 96%.
The stock has been working on a cup-like pattern since topping
at 52.93 on July 19.