Reynolds American Inc.
Reynolds American Inc. Fundamental Analysis
Reynolds American Inc. (RAI) shows moderate financial fundamentals with a PE ratio of 15.37, profit margin of 48.57%, and ROE of 30.39%. The company generates N/A in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 67.9/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze RAI's fundamental strength across five key dimensions:
Efficiency Score
ExcellentRAI demonstrates superior asset utilization.
Valuation Score
ExcellentRAI trades at attractive valuation levels.
Growth Score
WeakRAI faces weak or negative growth trends.
Financial Health Score
ModerateRAI shows balanced financial health with some risks.
Profitability Score
ModerateRAI maintains healthy but balanced margins.
Key Financial Metrics
Is RAI Expensive or Cheap?
P/E Ratio
RAI trades at 15.37 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, RAI's PEG of 0.15 indicates potential undervaluation.
Price to Book
The market values Reynolds American Inc. at 4.30 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at -1.06 times EBITDA. This is generally considered low.
How Well Does RAI Make Money?
Net Profit Margin
For every $100 in sales, Reynolds American Inc. keeps $48.57 as profit after all expenses.
Operating Margin
Core operations generate 84.53 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $30.39 in profit for every $100 of shareholder equity.
ROA
Reynolds American Inc. generates $11.89 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
FCF Per Share
Each share generates $0.75 in free cash annually.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
15.37
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.15
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.30
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.00
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.61
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.85
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.30
vs 25 benchmark
ROA
Return on assets percentage
0.12
vs 25 benchmark
ROCE
Return on capital employed
0.23
vs 25 benchmark
How RAI Stacks Against Its Sector Peers
| Metric | RAI Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 15.37 | 22.46 | Better (Cheaper) |
| ROE | 30.39% | 1263.00% | Weak |
| Net Margin | 48.57% | -5207.00% (disorted) | Strong |
| Debt/Equity | 0.61 | 1.24 | Strong (Low Leverage) |
| Current Ratio | 0.85 | 2.47 | Weak Liquidity |
| ROA | 11.89% | -192326.00% (disorted) | Strong |
RAI outperforms its industry in 4 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Reynolds American Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Defensive, Dividend, Low Volatility
EPS CAGR
N/A
Industry Style: Defensive, Dividend, Low Volatility
FCF CAGR
N/A
Industry Style: Defensive, Dividend, Low Volatility