Comparing RL’s Performance and Dividend Payout to Its Peers’

Sonya Bells - Author

May 10 2016, Updated 11:08 a.m. ET

Stock market performance

Ralph Lauren (RL) has given one of the worst performances among apparel and accessory companies in the stock market in 2016. Its stock price has fallen by more than 19% after having fallen 40% in 2015. In comparison, the S&P 500 Apparel and Accessories index has risen 5% year-to-date (or YTD).

The S&P 500 Apparel and Accessories index is a seven-company index that includes Ralph Lauren, Hanesbrands (HBI), VF Corporation (VFC), Coach (COH), PVH Corporation (PVH), Michael Kors (KORS), and Under Armor (UA).

Among the above seven companies, RL has been the biggest loser during the current year. KORS, PVH, COH, and VFC have risen 26%, 24.4%, 18.6%, and 5% YTD, respectively, while UA and HBI have fallen 6% and 5.5% YTD, respectively.[1. All information is as of May 6, 2016]

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Ralph Lauren has been a consistent dividend payer. The company has paid dividends worth $548 million over the five-year period between fiscal 2011 and fiscal 2015. The company’s dividend per share has grown at a compound annual growth rate of 39% during the same period.

Ralph Lauren announced a dividend of 50 cents per share in fiscal 3Q16. This represents a year-over-year rise of 11% in RL’s dividend per share. The company’s dividend payout ratio stood at 32.4% at the end of fiscal 3Q16.

The one-year forward yield on Ralph Lauren’s stock stands at 2.3% compared to VF Corporation’s 2.5% and Coach’s 3.5%. PVH Corporation and Hanesbrands have lower one-year forward yields of 0.2% and 1.6%, respectively, compared to RL.


Share buyback

Ralph Lauren also boosts the value of shareholder returns through its share repurchase program. The company has repurchased $2.5 billion worth of its common stock over the past five fiscal years. It repurchased 3 million shares amounting to $399 million in the first nine months of fiscal 2016.

ETF investors interested in getting exposure to Ralph Lauren can consider the First Trust Large Cap Core AlphaDEX ETF (FEX), which invests 0.42% of its portfolio in the company.

Read the next part of the series to know about the company’s valuations versus its peers’.


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