Acquisition VFC

VF-Corporation-LogoThis very recent market downturn I went ahead and purchased shares of V.F. Corporation (VFC). I honestly didn’t even know this company existed before this recent period. I guess I was kind of naive before when shopping at clothing retailers and thinking that most of the brands I was looking at were operating under one company. Well, not this company as it has a wide number of powerful brands representing itself. Dominant brands like Lee, Majestic, Nautica, The North Face, Timberland and Wrangler to name a few. I don’t know about you guys, but I see these brands practically on daily basis. What I really like about the apparel business is that majority of advertising is done by the consumers themselves. Brand logos are displayed on majority of clothing now a days, giving companies like this one free brand awareness when someone wears their clothes or shoes. Additionally, the company also just recently announced a 15.6% dividend raise for the following quarter.

V.F. Corporation was founded in 1899 and is currently headquartered in Greensboro, North Carolina. The company is a global leader in their industry who designs, manufactures, markets and distributes a variety of premium branded lifestyle apparel, footwear and accessory products. It primarily operates in United States and Europe as a conglomerate with a highly diversified portfolio of more than 30 powerful brand names. The company sells its products to specialty stores, departments stores, national chains and mass merchants through it sales distribution department. In addition, it also has their own company operated stores and e-commerce platforms of business. This Dividend Champion has been delivering consistent, long-term value to its shareholders by raising dividends since 1973.

  • Dividend Yield: 2.3%
  • 10 Year Dividend Growth Rate: 15.5%
  • Payout Ratio: 46.5%
  • P/E: 27.1
  • Consecutive Years of Dividend Raises: 43

I purchased 16 shares of VFC for the price of $65.65 adding $23.68 to my annual dividend income.

This is the 12th time I am initiating a stock acquisition this year. This transaction is my initial purchase of VFC into the portfolio. Furthermore, the acquisition of VFC makes it the 35th company I am invested in. Currently, VFC ownership stake represents to be around 1.5% of my current portfolio value.

The 12-month dividend income increased to $2,530.

Thank you for reading & have a great day!

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12 Comments

  1. JC @ Passive-Income-Pursuit on November 12, 2015 at 18:23

    I like VFC and hope to add this wonderful company to my own portfolio at some point. The selloff after earnings and then this recent pullback is giving investors an opportunity to add an excellent company. Been following this one for a while and it always seems a bit expensive but here around $65 is pretty tempting. Nice buy!

    • DividendVet on November 12, 2015 at 18:56

      Thanks, I accidentally came up on it just recently and finding out how diversified with quality brands they were gave me an easy choice to buy. Plus, like you said missed quarterly earnings gave a nice pullback for the stock, giving me discounted entry way into the ownership.

      Take care.

  2. DivGuy on November 13, 2015 at 10:45

    Interesting one for sure! Something to dig in. How was the valuation?

    Cheers,

    Mike

    • DividendVet on November 13, 2015 at 15:50

      For VFC company valuation, I try to stick to the basic company fundamentals such as the P/E Ratio, which is around P/E of 25 today. The acquisition is somewhat on a high side as I try to stick to lower than P/E of 20 usually, but the quality and the future DG of the company is worth every penny to me. Overall, there is a number of valuation models, it really depends on personal preference.

      Best of luck.

  3. DivHut on November 15, 2015 at 22:48

    I love VFC. In fact, it’s one of my best performers among all the stocks I own. I have held it since 2008 with no plans to sell this one for the foreseeable future. I don’t see it as a “fashion” business like ANF, AEO, ARO and the like. I see their clothes as fashion staples that’s “consumed” worldwide. Great buy in a very solid long term dividend payer and raiser.

    • DividendVet on November 16, 2015 at 15:43

      Wow, quite a streak of ownership there! The position currently must be quite a hefty yield on costs by now. That is great to hear it has been one of your best performers as the stock is quite of a sleeper within the DGI community. Like I mentioned in the post, I myself have just recently uncovered it.

      Definitely agree with the “consumption” statement, which is very good way of looking at this business. Clothes get old, torn up and used up, which justifies our society to purchase new clothes. Also, I see some VFC brands such as North Face as fashion statements, especially for younger generations, which essentially strengthens the brand loyalty. Either way looking forward to some juicy dividend raises in the future!

      Thanks for your thoughts.

  4. FerdiS on November 15, 2015 at 23:43

    Interesting purchase! I’m not too familiar with VFC, so I’ll have to take a careful look at this one. Congratulations and best of luck — and keep up the good work with your portfolio!

    Cheers
    FerdiS, DivGro

    • DividendVet on November 16, 2015 at 15:45

      Yeah, I wasn’t either until I looked a bit deeper. Just another Aristocrat with 42 years of consistently raising dividends. 🙂

      Cheers!

  5. Mrs. Dibidend on November 16, 2015 at 10:45

    Being a young new investor, I will consider this company for future purchases. Thanks for all the details. I am actually very familiar with all the brands you have mentioned, but never knew it was under V.F.

    • DividendVet on November 16, 2015 at 15:52

      My pleasure, glad you found some value in my recent purchase. As a young investor you definitely have time on your side to do some dividend growth compounding action. Lets keep the action going.

      Thanks for stopping by.

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