V.F. Corporation (VFC) designs and manufactures, or sources from independent contractors various apparel and footwear products primarily in the United States and Europe. This dividend champion has paid dividends since 1941, and has been able to boost them for 40 years in a row. The company’s last dividend increase was in October 2012 when the Board of Directors approved a 20.80% increase to 87 cents/share. The company’s peer group includes Coach (COH), Ralph Lauren (RL) and PVH Corp (PVH). Over the past decade this dividend growth stock has delivered an annualized total return of 18.70% to its shareholders.
The return on equity has decreased from 22% in 2002 to 12.50% by 2009. Since then, it has increased back up to 21.20% in 2011. I generally want to see at least a stable return on equity over time.
dividend payment doubling every six and a half years on average. If we look at historical data, going as far back as 1988, one would notice that the company has actually managed to double distributions every eight years on average. The dividend payout ratio has increased from 30% in 2002 to 57% in 2009, before decreasing to 33% 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.
is attractively valued at 16.90 times earnings and has a sustainable distribution. However, given the low yield of 2.30%, I would consider initiating a position in the stock on dips below $140.
Full Disclosure: None
- Why I am not worried about the Fiscal Cliff and Dividend Tax Increases
- A Record Week for Dividend Increases
- How long does it take to manage a dividend portfolio?
- Dividend Aristocrats List for 2012
This article was written by Dividend Growth Investor. If you enjoyed this article, please subscribe to my feed [RSS], or have future articles emailed to you [Email] or follow me on Twitter [Twitter].