VF Corp (VFC): Branded Dividend Excellenc

VF Corporation (VFC) is one of the world's largest clothing manufacturers and a historically reliable dividend payer.

It generally works in lock-step: companies that own strong global brands tend to also feature as companies that produce strong dividends.
 
A perfect example of this would be VF Corporation (VFC), which is one of the world's largest apparel companies. The company has annual revenues of more than $7.6bn and is represented in more than 150 countries through 47,000 retailers and produces more than 500 million items annually.
 
Some of the big name brands that the company represents include Wrangler, Nautica, North Face, Red Kap and Jan Sport.
 
Taking a look at the dividend offered by the company, investors will find a yield of 3.2%. This dividend has been raised every year since 1986 excluding 1997 where the stock underwent a 2 for 1 split.
 
Reporting second quarter earnings in July, the company reported a 47% surge in earnings to a record $1 per share with revenues up 7% to $1.6bn. Net income rose to $110.8m or $1.00 per share, compared with $75.5 million or $.68 per share in the 2009 quarter.
 
At the end of the quarter the company had around $540 million in cash in the bank and was expecting free cash flow of around $850 million for the full year.
 
While current indicators point to a pause in the economic recovery, strong, highly profitable brands with compelling products that speak to consumers' needs can be successful regardless of the external environment. VF Corporation’s (VFC) diversified brand portfolio continues to perform exceptionally well. The company believes that the second half of the year will improve from a sales and profits perspective.
 
Importantly in this price competitive environment the company was able lift its gross margins to record levels, rising 320 basis points to an all-time high of 47.1% while operating margins rose to 10.6% from 8.1%.
 
VF Corporation (VFC) will also be spending as much as $65m in the second half of the 2010 financial year to grow its brands.
 
With the company having already spent $318 million to repurchase 4 million shares (at an average price of $79.50), stockholders have reason to be optimistic. A combination of strong brands, bullish management, great cash flows and a solid dividend track record, all combine to make VF Corporation (VFC) a stock worthy of being considered for a dividend portfolio.

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