Tiffany & Co
is an internationally renowned retailer, designer and manufacturer of fine
jewelry, silverware, china, crystal and gift items. The company has grown
profits and dividends at an 11-22% rate over the last 10 years earning a 14-19%
return on equity. While revenues and
profits are impacted by economic activity, TIF
has weathered difficult times well and should sustain an above average growth
rate as a result of:
(1) higher sales
made possible by rising capital expenditures in its distribution, manufacturing
and diamond sourcing process,
(2) increased
penetration in international markets,
(3) a growing
customer base resulting from opening a line of new smaller stores with lower priced, higher margin products,
(4) stock
buyback program.
Negatives:
(1) earnings
from its foreign operations are exposed to currency fluctuations,
(2) recent
disruptions in foreign capital markets could impact its ability to financial
future growth,
(3) its
customers are sensitive to macroeconomic events.
Statistical Summary
Stock Dividend Payout
# Increases
Yield Growth Rate Ratio
Since 2004
Ind Ave 1.7 16* 27 NA
Debt/ EPS Down Net Value Line
Equity ROE Since 2004 Margin
Rating
Ind Ave 23 18 NA 6
NA.
*many retailers do not pay a
dividend.
Chart
Note:
TIF stock made good progress off its March 2009 low, quickly surpassing the
downtrend off its October 2007 high (straight red line) and the November 2008
trading high (green line). Long term the
stock is in an uptrend (blue lines).
Intermediate term it is in an uptrend (purple lines). Short term it is an uptrend (brown
line). The wiggly red line is the 50 day
moving average. The Dividend Growth
Portfolio owns a 50% position through a fairly circuitous route. In 2009, it Bought a full position in
TIF. However, in mid-2011, the company
had a serious earnings hiccup and the holding was Sold. In mid-2012, after the news was digested and
the outlook became a bit more visible, a one half position was repurchased.
6/14
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