- Vector Group managed to sustain dividends throughout 2020 thanks to the support of their tobacco earnings.
- Now that 2021 has started, this has swung the other way with their real estate earnings surging. But this should only be a temporary boost from a cyclical high.
- Thankfully it should still provide lasting help to their dividend by further lowering their net debt and thus leverage.
- This will help strengthen the margin of safety to sustain their dividends by improving their financial position.
- Whilst their moderate dividend yield of almost 6% looks exciting, I will be maintaining my neutral rating because I am wary of turning bullish when a company is experiencing cyclically high earnings.
For further details see:
Vector Group: Surging Real Estate Earnings Only Temporary, But They Still Help The Dividend