Why This Tobacco Company Is Cutting Its Dividend in Half
Investors hate dividend cuts, and companies know it. So when a company with a two-decade-long streak of annual dividend increases under its belt makes the choice to trim its disbursement by 50%, it isn't a decision that is taken lightly.
That's why tobacco and real estate company Vector Group's (NYSE: VGR) recent announcement that it will cut its dividend in half starting in 2020 is such a big deal. Here's what's behind that decision and what dividend-focused investors can learn from it.
Vector Group's dividend yield rose steadily through 2018 as the company's stock price fell. The yield peaked at over 15%. The yield has remained at double-digit levels throughout 2019, and it currently sits at around 11% following the November announcement that the board of directors had decided to cut the dividend from $0.40 per share per quarter in 2019 to $0.20 per share per quarter starting in 2020.
Source Fool.com
