Where does V.F. Corp. (VFC) rank after its 14% announced dividend increase?

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Summary; V.F. Corporation (VFC) announced a quarterly dividend of $0.42, a 14 percent increase from the prior rate of $0.37 per share. In the previous three years, the firm has given shareholders an average increase in dividends of over 18%.  Its yield at 2.7% is near its highest historical level in the past decade. The dividend will be paid at the new higher rate on December 19, 2016, to shareholders of record at close of business on December 9, 2016. V.F. Corp. is currently priced at $53.07.

Listed in the table below are the annual dividend payments since 2010. Our analysis of V.F. Corp. as a Top 100 Dividend Stock candidate is listed below;

Date Quarterly Dividend
12/9/2016 0.42
9/7/2016 0.37
6/8/2016 0.37
3/4/2016 0.37
12/4/2015 0.37
9/3/2015 0.32
6/5/2015 0.32
3/6/2015 0.32
12/5/2014 0.32
9/5/2014 0.263
6/6/2014 0.263
3/6/2014 0.263
12/6/2013 0.263
9/6/2013 0.217
6/6/2013 0.217
3/6/2013 0.217
12/6/2012 0.217
9/6/2012 0.18
6/6/2012 0.18
3/7/2012 0.18
12/7/2011 0.18
9/7/2011 0.158
6/8/2011 0.158
3/9/2011 0.158
12/8/2010 0.158
9/8/2010 0.15
6/4/2010 0.15
3/5/2010 0.15

Analysis of V.F. Corp. is based upon our five key criteria for the Top 100 list, which include; 

Category Value Score
Dividend Yield 2.71% 180
Dividend Growth (3-6 year avg) 17.6%  114
Forward P/E 15.05  105
S&P Financial Rating A  120
Beta 1.00  125
Total Score    644

Additional Information on P/S ratio and historical yield;

% Yield 3 Year Div. Growth Rate 6 Year Div. Growth Rate SPS 2016 P/S Ratio 10 yr P/S Low 10 yr P/S High 5 yr max Yield % 5 yr lowest Yield %
2.71% 18.5% 16.7% 30.2 1.76 0.55 1.83 2.79% 1.43%

Final Analysis;

  • V.F. Corp’s dividend yield is above that of the S&P 500 Index and is above its average historical dividend yield.
  • V.F. Corp. maintains a 3 year dividend growth rate of 18.5%.
  • V.F. Corp. has paid out a dividend consecutively for the past 23 years.
  • V.F. Corp. is trading at a modest forward P/E ratio and at a high price/sales (P/S) ratio.  From a relative valuation perspective based upon P/S, V.F. Corp. is overvalued.
  • V.F. Corp. maintains a credit rating of A. This is above investment grade, a positive.
  • V.F. Corp. maintains a beta of 1.00, on average with the market.

Based upon its high P/S ratio, V.F. Corp. does not qualify as one of our Top 100 Dividend Stocks.

V.F. Corp. Dividend Yield Chart (Click to enlarge)

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Chart Explanation:  Dividend growth stocks may be viewed favorably when the current yield is above historical readings for the past 5 years.

Further information on dividend investing and evaluating dividend growth candidates can be found at http://seekingalpha.com/author/timothy-mcintosh/articles

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