Vector Group: Potential Dividend Cut Inbound

Summary

• Vector Group stands out by engaging in both tobacco sales and luxury real estate development, presenting a unique combination of industries under one corporate umbrella.
• The company's historical emphasis on dividend payments, coupled with an aggressive push into real estate development, raises the risk of a potential dividend cut, creating a challenge for income-focused investors.
• Vector's focus on the discount segment is supported by a differentiated distribution network. Liggett deliberately sells cigarettes through tobacco outlets and mass merchandisers rather than convenience stores.

NikolayPeev/iStock via Getty Images

Introduction

In today’s article, I’d like to discuss the Vector Group (VGR), a peculiar company that sells cigarettes, and more recently, develops luxury real estate projects. Yes, you read correctly, this is a company that both sells tobacco and

Analyst’s Disclosure:I/we have a beneficial long position in the shares of VGR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.