Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

Vector Group Ltd. (VGR)

Company Dividend Discount ModelIndustry: TobaccoSector: Consumer Defensive

Valuation Snapshot

Stable Growth$8.39 - $11.89$10.12
Multi-Stage$15.94 - $17.50$16.71
Blended Fair Value$13.41
Current Price$10.94
Upside22.59%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2023202220212020201920182017201620152014
DPS-10.95%-1.36%0.820.830.860.831.551.461.371.291.221.09
YoY Growth---1.58%-2.68%2.78%-46.18%5.72%6.56%6.30%5.74%12.44%15.63%
Dividend Yield--7.66%6.94%7.11%5.97%16.43%14.14%7.43%7.19%6.50%6.31%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)199.67
(-) Cash Dividends Paid (M)126.49
(=) Cash Retained (M)73.19
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)39.9324.9614.98
Cash Retained (M)73.1973.1973.19
(-) Cash Required (M)-39.93-24.96-14.98
(=) Excess Retained (M)33.2548.2358.21
(/) Shares Outstanding (M)153.96153.96153.96
(=) Excess Retained per Share0.220.310.38
LTM Dividend per Share0.820.820.82
(+) Excess Retained per Share0.220.310.38
(=) Adjusted Dividend1.041.131.20
WACC / Discount Rate8.60%8.60%8.60%
Growth Rate-3.36%-2.36%-1.36%
Fair Value$8.39$10.12$11.89
Upside / Downside-23.32%-7.52%8.68%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)199.67194.97190.37185.89181.50177.23182.54
Payout Ratio63.35%68.68%74.01%79.34%84.67%90.00%92.50%
Projected Dividends (M)126.49133.90140.89147.48153.68159.50168.85

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate8.60%8.60%8.60%
Growth Rate-3.36%-2.36%-1.36%
Year 1 PV (M)122.04123.30124.56
Year 2 PV (M)117.04119.47121.93
Year 3 PV (M)111.66115.16118.73
Year 4 PV (M)106.04110.50115.10
Year 5 PV (M)100.31105.61111.13
PV of Terminal Value (M)1,897.781,998.022,102.45
Equity Value (M)2,454.872,572.062,693.90
Shares Outstanding (M)153.96153.96153.96
Fair Value$15.94$16.71$17.50
Upside / Downside45.75%52.70%59.94%

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