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Reynolds American Declares Dividend of $0.46 per Share

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Price movement

Reynolds American (RAI) has a market cap of $76.9 billion. It fell 0.26% and closed at $53.96 per share on December 1, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -0.72%, -0.94%, and 20.0%, respectively, on the same day. Reynolds American is trading 0.49% below its 20-day moving average, 5.4% above its 50-day moving average, and 7.7% above its 200-day moving average.

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Related ETF and peers

The Guggenheim S&P Equal Weight Consumer Staples ETF (RHS) invests 2.6% of its holdings in Reynolds American. RHS’s YTD price movement was -0.47% on December 1.

The market caps of Reynolds’ competitors are as follows:

  • Philip Morris International (PM) – $136.2 billion
  • Altria Group (MO) – $122.7 billion
  • Vector Group (VGR) – $2.6 billion

Reynolds American declared a dividend

Reynolds American declared a quarterly cash dividend of $0.46 per share on its common stock. The dividend will be paid on January 3, 2017, to shareholders of record on December 12, 2016.

Performance in fiscal 3Q16

Reynolds American reported 3Q16 net sales of $3.20 billion—a rise of 1.4% compared to net sales of $3.16 billion in 3Q15. Sales of the RJR Tobacco, Santa Fe, and American Snuff segments rose 0.80%, 21.6%, and 11.4%, respectively, between 3Q15 and 3Q16. The company’s cost of products sold as a percentage of net sales fell by 730 basis points, while its operating margin rose by 940 basis points.

Its net income and EPS (earnings per share) rose to $861 million and $0.60, respectively, in 3Q16—compared with $657 million and $0.46, respectively, in 3Q15. The company reported adjusted EPS of $0.61 in 3Q16—a rise of 10.9% over 3Q15.

Reynolds American’s cash and cash equivalents fell 26.1% between 4Q15 and 3Q16. Its debt-to-equity ratio fell to 1.4x in 3Q16—compared to 1.9x in 4Q15.

The company projected adjusted EPS of $2.27–$2.33 for fiscal 2016. It also repurchased $75 million of its common stock under its share repurchase program.

In the next part, we’ll discuss PVH Corporation (PVH).

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