NEW YORK (TheStreet) -- Lorillard (LO) shares closed trading down $1.14% to $67.86 on Thursday after the company announced that its board approved a dividend increase about 90 minutes before the closing bell today.
The Greensboro, NC-based tobacco company announced that its board approved a 7% increase in the company's quarterly dividend to 66 cents per share from 61.5 cents per share, payable March 10 to shareholders of record on March 2.
This is the seventh time the country's third largest cigarette maker has increased its quarterly dividend since it went public in 2008.
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TheStreet Ratings team rates LORILLARD INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate LORILLARD INC (LO) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, growth in earnings per share, increase in net income and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LO's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues slightly increased by 2.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for LORILLARD INC is rather high; currently it is at 56.59%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.48% is above that of the industry average.
- LORILLARD INC has improved earnings per share by 19.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LORILLARD INC increased its bottom line by earning $3.28 versus $3.14 in the prior year. This year, the market expects an improvement in earnings ($3.69 versus $3.28).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Tobacco industry average. The net income increased by 15.9% when compared to the same quarter one year prior, going from $282.00 million to $327.00 million.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 43.45% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: LO Ratings Report