Money and Finance
V.F. Corporation Stock Analysis
It's time for another stock analysis report so I figured we'd look at clothing and apparel giant V.F. Corporation (VFC). They are a dividend champion with 40 consecutive years of increasing their dividend. VFC closed trading on Tuesday, January 29th at $147.00.
Company Background:V.F. Corporation designs and manufactures, or sources from independent contractors various apparel and footwear products primarily in the United States and Europe. The company offers apparel, footwear, outdoor gear, skateboard-inspired and surf-inspired footwear, backpacks, luggage, handbags and accessories, outdoor apparel, travel accessories, and womens active wear primarily under the Vans, The North Face, Timberland, SmartWool, JanSport, Eastpak, Kipling, Napapijri, Reef, Eagle Creek, and lucy brands; and denim and casual bottoms, and tops principally under the Wrangler, Lee, Riders, Rustler, and Timber Creek by Wrangler brands. It also provides occupational, protective occupational, athletic, licensed athletic, and licensed apparel primarily under the Red Kap, Bulwark, Majestic, MLB, NFL, and Harley-Davidson brands; mens fashion sportswear, denim bottoms, sleepwear, and underwear, as well as handbags, luggage, backpacks, and accessories principally under the Nautica and Kipling brands; and premium denim and casual bottoms, sportswear, accessories, luxury mens apparel and footwear, premium womens sportswear, and accessories primarily under the 7 For All Mankind, John Varvatos, Splendid, and Ella Moss brands. The company sells its products to specialty stores, department stores, national chains, and mass merchants primarily through its sales force, independent sales agents, and distributors.
DCF Valuation:Analysts expect VFC to grow earnings 10.50% per year for the next five years and I've assumed they can continue to grow at 3.50% per year thereafter, right around the long term inflation rate. Running these numbers through a two stage DCF analysis with a 10% discount rate yields a fair value price of $201.59. This means that at $147.00 the shares are undervalued by 26.7%.
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