PVH stock continues to outshine its peers
Phillips-Van Heusen (PVH) stock has risen 27.5% YTD (year-to-date). It has outshined most of its apparel and fashion peers such as Ralph Lauren (RL), Hanesbrands (HBI), VF Corporation (VFC), Michael Kors (KORS), and Under Armor (UA). As of May 26, 2016, these companies were trading at -16%, -8%, 2%, 4%, and -7% YTD. PVH is the best performer in the seven-company S&P 500 Apparel and Accessories Index, which has risen 1% YTD.
Market reaction to earnings release
On May 26, 2016, PVH stock rose 6.3% in pre-Market trading after PVH announced its results on May 25 after the Market closed. PVH stock rose due to better-than-expected results and higher 2016 guidance. PVH closed at $93.73 on May 26. That was 4.3% higher than the previous day’s close.
PVH’s dividend payout among the lowest in its peer group
PVH is a consistent dividend payer, although its dividends are low compared to other apparel and fashion companies. The company’s current dividend payout ratio of 2.2% is lower than Coach’s (COH), VFC Corporation’s (VFC), and Ralph Lauren’s (RL), which have payout ratios of 92.6%, 46%, and 43%, respectively.
PVH’s dividends have seen 0% growth over the last 15 years. The company offers a fixed dividend of $0.04 per share every quarter. The dividend yield on the company’s current stock price stands at 0.2% compared to Coach’s and VF Corporation’s at 3.5% and 2.5%, respectively.
Outline of the stock repurchase program
In June 2015, PVH announced a $500 million three-year stock repurchase program. The company repurchased approximately 0.6 million shares of its common stock for $51 million in 1Q16. This brings the total repurchase value of 1.9 million shares to $177 million since its start in June 2015.
Investors who want exposure to PVH can consider the First Trust Consumer Discretionary AlphaDEX ETF (FXD), which invests 1.3% of its portfolio in PVH.