Buybacks and dividends
VFC (VFC) has been a consistent dividend payer and has increased its dividends for the last 44 years. As a result, the company is one of the dividend aristocrats included in the S&P Dividend Aristocrat Index, which comprises of 50 stocks that have regularly paid dividends for more than 25 consecutive years.
The company recently announced a dividend of 42 cents per share, an increase of 14% YoY (year-over-year). This brings its annualized dividend to $1.53 per share, up 15% from the previous year. In the third quarter, VFC bought back 2.7 million shares worth $166 million. Year-to-date, the company has repurchased $1 billion worth of its stock.
Investors who want exposure to VFC could consider the iShares Morningstar Large-Cap Growth ETF (JKE), which invests 0.40% of its portfolio in VFC.
VFC’s stock has lost a third of its value after touching its 52-week high
VFC is currently trading at $53.07, ~33% below its 52-week high price. The stock has lost ~15% of its value during the year. Many of the branded apparel companies have been under pressure during the current year. The S&P 500 Apparel and Accessories Index is down ~3% YTD. Ralph Lauren (RL), Hanesbrands (HBI), and Under Armour (UA), which are a part of this index, have YTD losses of 11.5%, 17%, and 9%, respectively. PVH (PVH) has, however, delivered a stellar performance this year. It’s sitting at YTD gains of ~50%.
Among the companies mentioned above, VFC has the highest dividend payout. The company pays 46% of its earnings to shareholders in the form of dividends. Hanesbrands, Ralph Lauren, and PVH have respective payout ratios of 38%, 43%, and 2%. Under Armour doesn’t pay dividends.