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PVH Corp. Outshines Peers in the Stock Market in 2016

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Stock market performance

PVH Corp. (PVH) has been one of the better-performing apparel and accessory companies in the Market this year. On May 19, 2016, its stock price increased by ~18% year-to-date (or YTD) compared to the 1.8% YTD decline of the S&P 500 Apparel and Accessories Index.

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

Among these companies, PVH has been the best performer in 2016. While KORS and COH have gained 0.8% and 13.3% respectively, RL, VFC, UA, and HBI have lost 20%,1%, 9%, and 7.8%% YTD. This information is current as of May 19, 2016.

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Dividends

PVH is a consistent dividend payer, although it offers low dividends compared to other apparel and fashion companies. Its current dividend payout ratio of 2.3% is lower compared to Coach’s (COH), VFC Corp.’s (VFC), and Hanesbrands’s (HBI) payout ratios of 92%, 46%, and 38%, respectively, during their last reported quarters.

PVH Corp.’s dividends have registered zero growth over the last 15 years as 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 Corp.’s 3.6% and 2.6%, respectively.

Stock repurchase program

In order to boost shareholders’ returns and enhance the earnings per share of the company, PVH announced a $500 million three-year stock repurchase program in June 2015. The company repurchased approximately 1.3 million shares of its common stock for $126 million during 2015 under this program.

Investors who want broad-based exposure to PVH can consider a pooled investment vehicle like the Consumer Discretionary Select Sector SPDR ETF (XLY). XLY invests 0.31% of its portfolio in PVH Corp.

Read the final part of the series to learn about the company’s valuations versus its peers.

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