PVH Corporation: An Investor’s Dream



PVH outshines its peers in the stock market

PVH Corporation (PVH) has been one of the best performing apparel and fashion companies in 2016 so far, rising by ~45% as of August 18, 2016. It has outperformed the S&P 500 Apparel and Accessories Index and each of the index’s companies.

The S&P 500 Apparel and Accessories Index is made up of seven companies: Ralph Lauren (RL), Hanesbrands (HBI), VF Corporation (VFC), Coach (COH), PVH, Michael Kors (KORS), and Under Armour (UA). The index has recorded a YTD (year-to-date) rise of 8.2%.

Michael Kors, Coach, Under Armour, and VF Corporation have risen by 22.1%, 17.3%, 2.2%, and 5.5%, respectively, YTD, while Hanesbrands and Ralph Lauren have recorded YTD falls of 7.4% and 2.6%, respectively.

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PVH is a consistent dividend payer, though it offers low dividends compared to other apparel and fashion companies. Its current dividend payout ratio stands at 2.2%. In comparison, the payout ratios of Coach, VFC, and Hanesbrands are 81%, 46%, and 38%, respectively.

PVH’s dividend has registered 0% growth over the last 15 years, as the company offers a fixed dividend of $0.04 per share every quarter. The one-year forward dividend yield on PVH’s stock is 0.1% compared to Coach’s 3.5% and VFC’s 2.6%.

Stock repurchase program

In order to boost shareholders’ returns and enhance its earnings per share, PVH announced a $500 million three-year stock repurchase program in June 2015. It repurchased ~1.3 million shares of its common stock for $126 million in 2015 under this program. It repurchased another 0.6 million shares of its common stock for $51 million in 1Q16.

ETF investors seeking to add exposure to PVH can consider the Shares Morningstar Mid-Cap ETF (JKG), which invests 0.52% of its portfolio in PVH.

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


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