V.F. Corporation, together with its subsidiaries, engages in the design, manufacture, and sourcing of branded apparel and related products for men, women, and children in the United States. This dividend aristocrat has increased distributions for the past 38 consecutive years. The latest dividend increase was in October 2010, when the company raised distributions by 5% to 63 cents/share.
Over the past decade this dividend stock has delivered annualized total returns of 15.80 % to its shareholders.
The company has managed to deliver a 6.90% average annual increase in its EPS between 2000 and 2009. Analysts expect V.F. Corp to earn $6.19 per share in 2010 and $6.67/share in 2011. In comparison, the company earned $4.13/share in 2009.
The company’s return on equity has deteriorated steadily since hitting a hit in 2003. Rather than focus on absolute values for this indicator, I generally want to see at least a stable return on equity over time.
The annual dividend payment has increased by an average of 11.50% annually since 2000, which is much higher than the growth in EPS. The main reason is the increase in the dividend payout ratio over the past decade, triggered by a steep one time dividend increase of almost 90% in 2006.
A 12 % growth in dividends translates into the dividend payment doubling every six years. If we look at historical data, going as far back as 1986, V.F. Corp has actually managed to double its dividend payment every seven and a half years on average.
The dividend payout ratio has increased over the past decade, breaking out above 50% in 2009. Given the expected earnings of $6.19 in 2010 and the new annual dividend rate of $2.52/share, I would expect the payout to drop to 50% and to decrease further by 2011. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.
Currently, VF. Corp is attractively valued at 13.50 times earnings, has an adequately covered distribution and yields 3%. I would consider initiating a position in the company on dips.
Full Disclosure: None
- Eleven Dividend Machines Beating Inflation
- 33 Dividend Champions to Consider
- 12 Dividend Stocks to own in this market
- Diversifying into small and mid cap dividend stocks
This is a guest post written by Retire Before Dad. He writes about dividend investing, personal finance and travel at the Retire Before Dad...
This is a guest post from Roadmap2Retire blog , which documents the retirement journey of a dividend growth investor from Canada. I am an ...
S&P 500® Dividend Aristocrats measure the performance S&P 500 companies that have increased dividends every year for the last 25 con...
This is a guest post written by Ben Reynolds at Sure Dividend. Sure Dividend helps individual investors build high quality dividend growth ...
I believe that diversification is the only free lunch in investing. However, different investors have different takes on the topic of diver...
Investing in dividend growth stocks has been a winning investment over the past 8 – 10 years. I myself have invested in dividend growth stoc...
I have shared with you early in the year, that I am essentially living off dividends and side income in 2016. I am saving my other income i...
As an investor, I have always believed in diversification . I would rather err on the side of caution, rather than swing for the fences. It ...
The Procter & Gamble Company (PG), together with its subsidiaries, manufactures and sells branded consumer packaged products worldwide....
Unilever PLC (UL) operates in the fast-moving consumer goods market in the Africa, Americas, Asia Pacific, Europe, and Middle East. The comp...