Lorillard And Its Dividend Growth Potential
By Tradevestor:We've made no secret of the fact that Philip Morris (PM) is our favorite tobacco stock. But another tobacco stock which we missed narrowly missed buying in 2011 when it was trading at about $70 has now grown into a monster. Lorillard (LO) has had a magical stock run, backed up by great earnings and increasing dividends. Here are some quick facts about Lorillard:
- LO has been trading as an independent public company since 2008.
- LO has increased its dividend by an average of 14% per year since then.
- The current payout ratio is about 75%, not a bad number for tobacco stocks.
- Lorillard is heavily dependent on menthol cigarettes. This is a clear danger sign that will send the shares crashing on any bad news about menthol.
As in the earlier exercises, let us look at the power of dividend growth for an investor who can set aside his/herComplete Story »
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