With the United States in the edge of a fiscal cliff and Europe
now officially in arecession , investors are jumping into more
defensive stocks that can hold up in this hostileinvestment
environment. Short of a zombie apocalypse, these are stocks you can
feel safe about owning no matter what happens in theeconomy or the
stockmarket . Think stalwarts like
Kimberly Clark (
J.M. Smucker's (
[In other words, these are companies that have been consistent
winners and dominate their industries. StreetAuthority Co-Founder
Paul Tracy calls these the
World's Greatest Businesses
, or WGBs for short.]
As you can probably tell, the best place to find such stocks is
in consumer goods. After all, consumers rarely skimp on items they
need. This means they will spend on companies producing food,
medicine, beauty products and household necessities no matter what
economic conditions come their way.
While recently searching for safe, long-term investment
opportunities, I found a stock that's very popular among consumers.
Since 1946, many households have used and continue to purchase one
of the world's most popular products. You know it from its
"burpable" seal, which inventor Earl Tupper modeled after a paint
can -- the Tupperware.
But it was after the first Tupperware party in 1948 that sales
really took off.
Tupperware Brands Corp. (
is the pioneer of the party marketing strategy, providing millions
of women around the world with an independent business opportunity.
According to this strategy, Tupperware representatives approach
other women about hosting a party in their homes in order to
demonstrate a few products. In turn, the hostess gets gifts and a
percentage of the proceeds from the sold products.
The American pantry and fridge have been transformed ever
Today, Tupperware is more than just a kitchen container
manufacturer. The company's current product lineup includes
products from cooking tools to cutlery and classic storage
containers (under the Tupperware brand), and now beauty and
personal care (under the Armand Dupree, BeautyControl, Avroy
Shlain, Fuller Cosmetics, NatuCare, Nutrimetics and Nuvo brands) --
all of which can still be purchased at parties or online.
With operations in almost 100 countries, the company projects
rising earning estimates, a healthy growth and a decent valuation
in the years to come, making it a compelling stock to add to a
Financially, the company is strong, with revenue andearnings
steadily rising since the economic downturn of 2008. Third-quarter
earnings more than quadrupled to $47.5 million, or 85 cents per
share, compared with the year-ago period. For 2012, earnings are
expected to reach $4.96 per share, an 84% jump from 2008, and rise
11% in 2013 to about $5.54. Revenue has been rising at a 5% clip
since 2008. It is expected to reach about $2.6 billion this year
and grow about 5% in 2013 to $2.7 billion.
Sincegoing public in 1996, this company has also consistently
paid dividends to shareholders. In the third quarter, Tupperware
raised itsdividend payout 20% to 36 cents per share, putting
theyield at about 2%. Take a look at the chart below...
Risks to Consider:
Tupperware is not immune to an economic downturn. If the
markets have a significant selloff, then the stock price could
decline with the market, as it happened during the market selloff
in 2008, when Tupperware was down 28%. However, by 2009 it had
rebounded nicely (about 109%).
Action to Take -->
Buy Tupperware Brands up to $65 a share. The stock is must-have for
investors looking to build a defensive portfolio. The stock has
delivered an annualized return of 16% during the past 10 years and
could hit $80 within the next 12-18 months, all while paying a 2%
dividend along the way.
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