It's been about a year since the last time I wrote about and bought L Brands stock and I've done rather well owning those shares. I've not only seen the stock rise in price over the last year but I've seen some rather lucrative dividends too. So today I thought I'd look at L Brand's numbers and its chart and see whether it's still a good time to buy shares in this company. And if it is, I plan to add to my position.
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.
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.
L Brands, Inc. operates as a specialty retailer of women’s intimate and other apparel, beauty and personal care products, and accessories. The company operates in two segments, Victoria’s Secret and Bath & Body Works. Its products include loungewear, bras, panties, sleepwear, swimwear, athletic attire, fragrances, shower gels and lotions, aromatherapy, soaps and sanitizers, home fragrances, and personal care accessories. The company offers its products under the Victoria’s Secret, Pink, Bath & Body Works, La Senza, Henri Bendel, C.O. Bigelow, White Barn Candle Company, and other brand names. L Brands, Inc. sells its merchandise through company-owned specialty retail stores in the United States, Canada, and the United Kingdom, which are primarily mall-based; through its Websites and catalogues; and through franchises, licenses, and wholesale partners. As of February 1, 2014, the company operated 2,648 retail stores in the United States; 270 retail stores in Canada; and 5 retail stores in the United Kingdom. It also operated 331 La Senza stores in 30 countries; 55 Bath & Body Works stores in 14 countries; 4 Victoria's Secret stores in 2 Middle Eastern countries; and 198 Victoria’s Secret Beauty and Accessories stores, and various small-format locations in approximately 60 countries. The company was formerly known as Limited Brands, Inc. and changed its name to L Brands, Inc. in March 2013. L Brands, Inc. was founded in 1963 and is headquartered in Columbus, Ohio.
(Summary) (Company) (Daily Chart)
(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% |
I'm amazed by the numbers above. The stock price has increased by almost 30%. The target price has increased by almost 53%. The dividend has increased by almost 47%. And earnings have increased by almost 23%. Those are incredible numbers for any company.
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.
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