Thursday, August 23, 2012

What the Future Holds For Lorillard

In 1760 French Protestant Pierre Lorillard starts to sell tobacco products, which in order to keep fresh she wrapped in dried animal bladders. Pierre Lorillard produces these smokes on Chatham Street, at present Park Row in a small factory. Lorillard directs all profits from this business to support the Revolutionary War and also funded George Washington’s army.
At present approximately 250 years after the appearance of Lorillard Incorporated, the cigarette company is planned to pen at about $127.00 per share, and is the world’s third giant tobacco company, with a market capitalization of 16.63 billion. A small plant of the 1760’s has become an internationally recognized name. Despite such a great success, current events have made several attempts to prohibit menthol, an essential component in Lorillard’s best selling Newport cigarettes, that accounts for around 90% of all Lorillard’s sales. So will Lorillard be able to continue grow, or will this so old business disappear with time? According to estimates, in 2010 Lorillard announced profits per share of $6.78. In 2011, Lorillard declared that profits per share had lifted $1.21, to $7.99. In 2012, Lorillard’s profits per share have risen to $8.58, showing weakening shares’ growth. It is estimated that the growth will stabilize in 2013. The cigarette manufacturer is planning to expand these profits in the coming future and gain bigger share of the United States tobacco industry.
The cigarette industry is well known for its largest dividend payouts, and Lorillard doesn’t infringe this process. At present Kent cigarettes manufacturer pays out one of the biggest dividends in the industry. This dividend has significantly increased from $5.20 per year, in 2011, and is estimated to proceed to boost in the future. In comparison with the main tobacco rivals, as for instance Reynolds American, Altria Group, Philip Morris International, and British American Tobacco, Lorillard has better performance.
Currently, Lorillard is in the middle of the road regarding the growth, while Reynolds American occupies first position, increasing its profits per share in six years. Lorillard’s dividend growth is the fastest in the industry. As about the net profit margin, Lorillard occupies second position after the Phillip Morris, which tops the industry.