Dividend Aristocrat Overview: V. F. Corporation

About V. F. Corporation

V. F. Corporation has a diverse set of well-known apparel, footwear, outdoor equipment and sportswear brands to serve customers.  These brands include Lee, Wrangler, Eastpak, Jansport, The North Face, Timberland, Nautica, and others.

V. F. Corporation markets brands known worldwide, including Lee Jeans. Photo courtesy Jaimecat*/flickr.com.

V. F. Corporation markets brands known worldwide, including Lee Jeans.
Photo courtesy Jaimecat*/flickr.com.

In 2013, the V. F. Corporation earned $1.2 billion on $11.4 billion in revenues.  Earnings were up 11.4% from 2012 while revenues were up 5%.  In 2012 the company launched the 17×17 initiative to generate $17 billion in revenues by 2017.  Starting from the 2012 base of $10.9 billion means that the company needs to grow revenues at a compounded rate of 10% per year to meet its target.  The company projects this increase will come from a combination of organic (8% growth) and acquisitions (2% growth).  Associated with this growth in revenue, V. F. intends to grow earnings per share by 13% per year through 2017.  From 2012 to 2013, V. F. grew earnings per share from $2.47 to $2.76 – a growth rate of 11.7%.  Unfortunately on both measures (revenues and earnings per share), V. F. Corporation is not yet meeting their declared objectives.  How much this will impact the company’s ability to continue to grow its dividend remains to be seen.

The company is a member of the S&P 500 index, a Fortune 500 company and trades under the ticker symbol VFC.

V. F. Corporation’s Dividend and Stock Split History

V. F. Corporation has increased dividends annually since 1972.  The company met the Dividend Aristocrat criteria of 25 years of consecutive dividend increases in 1997.  V. F. Corporation usually announces dividend increases in October and begins paying the new dividend in December.  In October 2013 V. F. simultaneously announced a 4-for-1 stock split and a 20.8% increase in the quarterly dividend payout, from 87 cents to $1.05 per share on a pre-split basis.

V. F. Corporation's dividends have jumped since 2012. (Click to enlarge.)

V. F. Corporation’s dividends have jumped since 2012.
                                   (Click to enlarge.)

V. F. Corporation has traditionally increased dividends by less than 5% but in recent years has sharply increased its dividend payout.  As mentioned above, the company increased dividends by 20.8% in 2013, up from 16.1% in 2012 and 7.4% in 2011.  These recent increases have improved V. F.’s longer term compounded annual dividend growth rate (CADGR).  V. F.’s 5-year CADGR is 9.5% while its 10-year CADGR is 13.7%, helped by a doubling of dividends from 2005 – 2007.

In addition to the 4-for-1 stock split announced in October 2013, V. F. Corporation has split it stock 8 other times since 1963.  The company split its stock 2-for-1 in December 1963, June 1972, December 1982, December 1983, April 1986 and November 1997.  The company also announced 3-for-2 stock splits in December 1965 and December 1967.

Had you purchased 100 shares of V. F. Corporation in October 1997 when the company increased its dividend for the 25th consecutive year would have cost about $7,000 would now be 800 shares worth $48,000 (assuming that dividends were not reinvested) – a compounded annual growth rate of 12%.  You also would have collected a total of $732 in dividends in 2013 from the 800 shares of stock.

Direct Purchase and Dividend Reinvestment Plans

V. F. Corporation offers both a direct purchase and dividend reinvestment plan.  If you’re interested in buying stock directly from the company, you’ll need to invest at least $500 either in a one-time purchase or through at least 10 automatic investments of $50 each.  When you do, you’ll pay a $10 one-time set up fee.  Additional direct investments must be at least $50.  Each time you buy V. F. Corporation stock in the plan, you’ll pay a fee of $5 for one-time purchases or $2.50 for purchases through automatic debit, plus 5 cents per share.

When reinvesting dividends, the plan will deduct 5% of the reinvested amount – up to $3 – plus 5 cents per share purchased.

When you go to sell your shares in the plan, you’ll pay 12 cents for every share sold plus a plan fee which is either $12 or $25, depending on the type of sell order.

Helpful Links

V. F. Corporation Investor Relations Website

Current quote and financial summary for V. F. Corporation (finviz.com)

Information on the direct purchase and dividend reinvestment plans for VFC

Want to find out about more great dividend growth stocks?

Check out the list of current S&P Dividend Aristocrats.