Safe Dividend Stocks for the Next Market Crash: VF Corp (VFC)
VFC Dividend Yield: 3.2%
5-year Annual Dividend Growth Rate: 18.7%
VF Corp (NYSE:VFC) is the badly bruised retailer behind such well-known lifestyle brands as The North Face, Timberland, Vans, Lee, Wrangler and Nautica.
Flat sales in 2016 have the market worried about the company’s ability to grow in the continued age of Amazon. However, keep in mind that one bad year hardly breaks an investment thesis for a venerable dividend aristocrat such as this.
After all, management has spent decades building a collection of more than 30 brands and has a stellar record of acquiring accretive rivals. The company then uses its expertise in global low-cost supply chains and distribution to boost sales, increase margins, and growth free cash flow.
Given that VF Corp has a roughly 26% market share in the fast-growing $46 billion global athletic/casual clothes business, the company’s time-tested growth strategy should allow for long-term sales and EPS growth of 6%, and 9%, respectively. Combined with a moderate FCF payout ratio of just 50%, VFC has potential for 9% to 10% annual dividend growth.
VF Corp has raised dividends for 43 straight years, making it one of the most reliable dividend growth stocks in the market over time.