4-Star Stocks Poised to Pop: Lorillard

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cigarette specialist Lorillard (NYS: LO) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Lorillard's business and see what CAPS investors are saying about the stock right now.

Lorillard facts

Headquarters (Founded)

Greensboro, N.C. (1760)

Market Cap

$15.3 billion

Industry

Tobacco

Trailing-12-Month Revenue

$4.3 billion

Management

Chairman/CEO Murray Kessler

CFO David Taylor

Return on Capital (Average, Past 3 Years)

82.1%

Cash/Debt

$1.15 billion / $1.8 billion

Dividend Yield

4.7%

Competitors

Altria (NYS: MO)

Reynolds American (NYS: RAI)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 94% of the 341 members who have rated Lorillard believe the stock will outperform the S&P 500 going forward. These bulls include HunkaChunk and YM7820.  

Just last month, HunkaChunk listed a few of Lorillard's positives: "Cash rich, stable dividend, smallest player so largest potential for growth."

Over the past three years, in fact, Lorillard has grown its top line at a solid rate of 9% annually. That's faster than other tobacco plays such as Altria (2%) and Philip Morris International (NYS: PM) (6%), let alone Reynolds' average revenue decline of 1%.

CAPS member YM7820 elaborates on the Lorillard bull case:

Cigarettes cost 1c to make, and sell for about 50c with minimal overhead cost. Combined with its addictiveness, that makes for a nice business model. Keep sending me cash ... much better than a savings account. Not worried about litigation, getting rid of cigarettes is almost as impossible as getting rid of oil, gambling, or prostitution. If only they could push Newport internationally.

What do you think about Lorillard, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackLorillard?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended creating a bear put ladder position in Lorillard and buying shares of Philip Morris International. The Fool owns shares of Altria and Philip Morris. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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