
L Brands is composed of two stores that can be found in almost every mall in America - Victoria's Secret and Bath & Body Works. The company also has another outlet simply named Pink that offers many of the same products offered at Victoria's Secret yet geared to a younger audience. The company also has an online presence in which customers can order their products and have them delivered directly to their home. Between Victoria's Secret, Pink and Bath & Body Works, the company is the premiere provider of bras, panties, loungewear, sleepwear, swimwear, athletic attire, fragrances, shower gels and lotions, aromatherapy, soaps and sanitizers, home fragrances, and personal care accessories for women.
(Summary) (Company) (Daily Chart)
13 August 2014 Price $62.26 1yr Target $62.38 Analysts 25 1yr Cap Gain 0.19% Dividend $1.36 Yield 2.18% 1yr Tot Return 2.37% 3yr DGR 34.94% Payout Ratio 43.87% Beta 1.07 EPS (ttm) $3.10 EPS next yr $3.58 P/E 20.08 PEG 1.80 ROA 13.80% ROE -137.90% | 4 August 2015 Price $80.72 1yr Target $95.73 Analysts 26 1yr Cap Gain 18.59% Dividend $2.00 Yield 2.47% 1yr Tot Return 21.06% 3yr DGR 25.70% Payout Ratio 52.49 % Beta 0.98 EPS (ttm) $3.81 EPS next yr $4.23 P/E 21.19 PEG 2.10 ROA 16.10% ROE -297.30% |
Conclusion
I like this company quite a bit and I've been in and out of the stock several times since I first discovered it in the 1980s. Over the last year or two I've decided to maintain a position in this company and add to that position over time. This company is 30% higher today than when I wrote the last article on it (see the article L Brands, Inc for additional information and background data) and it's estimated to be up another 18% over the next year. All while paying a dividend of almost 2.5%. Those are phenomenal numbers and I wish every stock I owned did as well.
I also like the benefit and surprise of receiving special dividends at different times of the year. At times these special dividends can often double or even triple the income from the regular dividend.
While this company has not become a core holding for me because of the inconsistency of the company's fundamentals and the finickiness of the fashion industry, it is becoming a bigger and bigger portion of my accounts. Since I believe this company has cornered the market in its segment of the fashion industry and has maintained it's first place position for decades, I think this company will continue to flourish for decades more.
I intend to continue to add to my position in L Brands as funds become available because I believe this is a better buy today than it was last year. And last year was a good year to own L Brands.
The Competition
L Brands, Inc is part of the Apparel Stores Industry which is part of the Services Sector of the economy. Below are a few of the major corporations included in this industry. They are listed in the order of their market capitalization.