Today’s stock selection is a footwear and apparel manufacturer, whose shares recently split 4:1.
VF Corporation (VFC)
from Blue Chip Growth
VF Corporation (VFC) was on our Buy List not too long ago—from December 2011 through February 2012. In that time we locked in a tidy 23% gain on this brand name giant.
VF Corp. sells footwear and apparel under a number of popular brand names, including adventure and active wear under The North Face, Timberland, Vans, Reef, Eastpak, JanSport, SmartWool and Eagle Creek brands, plus denim and casual clothes under the Wrangler, Lee, Rustler, and Timber Creek by Wrangler brands, as well as fashion denim and sportswear under the Rock & Republic brand.
VF Corp is a great winter weather stock and is a strong growth story. In the third quarter, sales rose 4.8% to $3.3 billion compared to $3.15 billion in the same quarter a year ago. During the same period, the company’s earnings rose to $433.8 million or $3.89 per share compared to $381.3 million or $3.42 per share. The analyst community was expecting $3.78 per share, so VF posted a 2.9% earnings surprise. For the fourth quarter, the analyst community is expecting 10% annual sales growth and 8.8% annual earnings growth.
In addition to its strong earnings prospects, this stock is a good value as it’s currently trading at a lower multiple than the industry average. Along with the stock split, VF’s Board of Directors also boosted its dividend by 21%. The stock currently yields 1.8%, making it one of the highest dividends in the Apparel industry. The company has raised its dividend for 41 straight years and in the past decade has bought back nearly $5 billion of outstanding stock.
The stock hit an all-time high at $245.79, right before its December 23 4:1 split. So you’ll be able to buy shares at a lower price—add VFC under $64 per share.
Louis Navellier, Blue Chip Growth, www.bluechipgrowth.com, 800-718-8289, January 2014