We received US$62.88 ( 149.7142 shares x 42 cents) from VF Corp (VFC). This is the second consecutive quarter that the firm paid dividends at 42 cents per share. In 2016, the stock price has declined by -10% YoY basis as investors are wary over its revenue performance. 2016 revenue drivers were international sales and direct to channel distribution. In VF Corp’s 2017 guidance outlook, the company expects that earnings per share (EPS) shall decline to a low single digit due to foreign exchange conversion, however, analysts predict that VF Corp will have a flat performance throughout 2017.
The dividend yield is +2.8%. Since 2016, the dividend yield has an increasing trend due to the decrease in stock price. The dividend yield may continue to increase in 2017 as the company foresees a weak growth in 2017.
The dividend payout ratio is 0.55. The payout ratio is increasing since 2013 because the dividend growth is higher than the earnings growth. In the last 5 years, earnings (excluding non-recurring items) has grown approx. +7%, which is lower to the the 5yr period dividend growth rate. In the last 12 months, earnings (excluding non-recurring items) contracted to -8.6%.
The dividend growth rate is 15% for 1 yr period. In the last 10 years, annual dividend growth has been double digit ( at >10% rate); however, the dividend growth rate has been larger than earnings growth rate, thus, pushing dividend ratio in an upward trend since 2013.
Despite a weak earnings forecast in 2017, we expect that VF Corp will be continuing to pay dividends to investors however, we are expecting that the next dividend increase will be between 11% to 13% based from our analysis.