PVH outshines its peers in the stock market
PVH Corporation (PVH) has easily been one of the best-performing apparel stocks this year. The company’s YTD (year-to-date) returns stand at a whopping 46% as of August 25, 2016. It has outperformed the S&P 500 Apparel and Accessories Index and each of its index companies by a huge margin.
The S&P 500 Apparel and Accessories Index is a seven-company index that includes Ralph Lauren (RL), Hanesbrands (HBI), VF Corporation (VFC), Coach (COH), PVH, Michael Kors (KORS), and Under Armour (UA). The index has risen by 8.8% to date.
Its components Michael Kors, Coach, Under Armour, and VFC have recorded YTD rises of 24.7%, 18.4%, 2.6%, and 5.5%, respectively, while Ralph Lauren and Hanesbrands have seen YTD falls of 4% and 6.5%, respectively.
Stock market reaction to 2Q16 earnings release
PVH reported its earnings after the market closed on August 24, 2016. The company’s stock price fell by 1.3% the next day, despite delivering an earnings beat and outperforming its own 2Q16 guidance.
PVH’s dividend payout among the lowest in its peer group
Though PVH is a consistent dividend payer, it offers very low dividends. It paid a dividend of $0.04 per share during 2Q16 and announced a third-quarter dividend of the same amount. The company hasn’t hiked its dividend in the last 15 years.
PVH’s dividend payout ratio stands at 2.2%. In comparison, Coach’s, VFC’s, and Ralph Lauren’s dividend payout ratios are 81.4%, 46%, and 43%, respectively. The dividend payout ratio indicates the percentage of net income disbursed to shareholders in the form of dividends.
ETF investors seeking to add exposure to PVH can consider the iShares Morningstar Mid-Cap ETF (JKG), which invests 0.52% of its portfolio in PVH.