Market Overview

Top Performing Dividend Payers in Consumer Goods with the Most Upside Potential (BC, F, MOV)

It is not unusual for stocks on a tear to overrun their mean price targets, which is a signal of how far analysts on average expect the share price to climb.

Some of the top performing dividend payers in the consumer goods sector over the past six months, such as farm products provider Alico (NASDAQ: ALCO) and Coca-Cola Hellenic Bottling (NYSE: CCH), have done just that. Others are at or near their mean price targets.

But analysts believe that Brunswick (NYSE: BC), Ford (NYSE: F) and Movado (NYSE: MOV) still have some room to run, despite rising more than 35 percent in the past six months.

Brunswick

This maker of outboard motors, treadmills, billiard tables and other recreational products has a market capitalization of more than $3 billion. Its dividend yield is near 0.1 percent, and the forward earnings multiple is less than the industry average price-to-earnings (P/E) ratio.

The long-term earnings per share (EPS) growth forecast is about 12 percent, and the return on equity is more than 200 percent.

The number of shares sold short as of the January 31 settlement date represents about eight percent of the float, but that is the lowest level of short interest since last May.

Of the 10 analysts who follow the stock and were polled by Thomson/First Call, nine of them recommend buying shares.

The mean price target, or where analysts expect the share price to go, represents more than 12 percent potential upside over the current share price. That would be a level shares have not seen since 2006.

Shares have risen about 57 percent from six months ago and are up more than 16 percent year to date. The share price hit a new multiyear high on Friday. The stock has outperformed the Dow Jones Industrial Average and the S&P 500 over the past six months.

Ford

The only Big Three automaker not to need a bailout during the most recent recession now sports a market cap near $50 billion. Its dividend yield is about 3.1 percent.

Its long-term EPS growth forecast is more than 10 percent, and the P/E ratio is much less than the industry average. The operating margin is in line with the industry average, but the return on equity is more than 142 percent.

The short interest was a little more than one percent of the float at the end of January. That was down by about two-thirds from a month earlier, and the smallest number of shares sold short in at least a year.

The consensus recommendation of the 21 analysts surveyed is to buy shares, and it has been for at least three months. Their mean price target is about 14 percent higher than the current share price. The stock has not seen that level since May of 2011.

Shares pulled back about nine percent leading up to the recent earnings report, wiping out the year-to-date gain. But the share price is still more than 35 percent higher than six months ago.

The stock has outperformed rivals General Motors (NYSE: GM) and Toyota (NYSE: TM), as well as the broader markets, over that time.

Movado

Based in Paramus, New Jersey, this fine watch maker has a market cap near $925 million and a dividend yield of about 0.5 percent. The P/E ratio is lower than the industry average, and the long-term EPS growth forecast is about 12 percent. The return on equity is a more than 14 percent, and the operating margin is greater than the industry average.

The short interest was about three percent of the float at the end of January, which was the second lowest number of shares sold short since last April.

One of the two analysts surveyed recommends buying shares, and the other recommends holding them. But their mean price target is more than 14 percent higher than the current share price. That price target would be a new multiyear high.

The share price is more than 78 percent higher than a year ago, and up more than 19 percent year to date. It reached a new multiyear high last week.

Over the past six months, the stock has outperformed the likes of Coach (NYSE: COH), Luxottica (NYSE: LUX) and Tiffany (NYSE: TIF), as well as the broader markets.

Posted-In: Alico Brunswick Coach Coca-Cola Hellenic Bottling Ford General Motors GM Luxottica Movado Tiffany ToyotaLong Ideas Short Ideas Trading Ideas Best of Benzinga

 

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