Tupperware Brands Grows Dividend, Wall Street Notices


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A common pitfall for many income investors is to focus on yield without paying any attention to price performance.

For dividend investors,Tupperware Brands ( TUP ) offers the best of both worlds. Not only has it been a strong price performer in the market, but it also pays a nice dividend.

The company makes food preparation, storage and serving solutions for the kitchen and home. It also offers a line of beauty and personal care products. Tupperware sells its products directly to distributors. Its current sales force stands at 2.8 million with an active sales force of 800,000.

After its IPO in 1996, Tupperware paid a consistent quarterly dividend of 22 cents a share. In October 2009, it raised its dividend by 14% to 25 cents a share. Two additional 20% hikes declared in November 2010 and January 2012 left the dividend at 36 cents a share.

When the company reported fourth-quarter results in late January, shares gapped up nearly 5%. The midcap company reported quarterly profit of $1.71 a share, up 14% from a year ago. Sales rose 5% to $711 million.

The big news, though, was that it raised its quarterly dividend to 62 cents a share, up 72% from 36 cents. It also increased its share repurchase program from $1.2 billion to $2 billion and extended it two years to Feb. 1, 2017.

Since a breakout from a cup-with-handle base in January, Tupperware has rallied about 20%. Its annual dividend yield is 3%, slightly above the S&P 500's current yield of 2.5%. Its dividend growth rate is a respectable 13%.

Tupperware reports earnings Wednesday before the open, expected to rise 10% to $1.13 a share with sales up 4% to $662.9 million.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance , Investing Ideas

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