Reynolds American Yields 5.55%

A tobacco stock I like a lot is Reynolds American ($RAI). In fact, it used to be a member of our Buy List. Reynolds is a very good company and I like to check in every so often to see how they’re doing.

Today the company reported Q4 earnings below estimates (77 cents vs 81 cent est.) and the shares are taking a hit. The good news is that Reynolds sees 2014 EPS ranging between $3.30 and $3.45. That’s especially good to get that kind of guidance so early in the year. Wall Street had been expecting $3.44 per share. They earned 3.19 per share for all of 2013.

The other good news is that Reynolds raised their quarterly dividend from 63 cents to 67 cents per share. That comes to $2.68 per share for the year. Notice also how RAI pays out about 80% of their earnings as dividends.

With the lower share price and higher dividends, Reynolds now yields 5.55% which is the equivalent of 890 Dow points.

Posted by Eddy Elfenbein on February 11th, 2014 at 1:56 pm

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