Market Overview

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

Top Performing Dividend Payers in Consumer Goods with the Most Upside Potential AVP, LZB, 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 this year's top performing consumer goods stocks that pay dividends, such as Flowers Foods (NYSE: FLO), Hormel Foods (NYSE: HRL) and Standard Motor Products (NYSE: SMP) have done just that. Others are at or near their mean price targets.

But analysts believe that Avon Products (NYSE: AVP), La-Z-Boy (NYSE: LZB) and Movado (NYSE: MOV) still have some room to run, despite rising more than 20 percent year to date.

Avon Products

This manufacturer and marketer of personal care and beauty products has a market capitalization of about $8.7 billion and a dividend yield near 1.2 percent. The forward earnings multiple is less than the industry average price-to-earnings (P/E) ratio. The New York-based company also has a long-term earnings per share (EPS) growth forecast of more than 20 percent.

The number of shares sold short, as of the February 28 settlement date, represents less than three percent of the total float, after falling almost 43 percent from the previous period. That is the lowest level of short interest in Avon Products since last June.

The consensus recommendation of the 14 analysts who follow the stock and were polled by Thomson/First Call is to hold shares. But the analysts feel the stock has some head room as their price target represents more than 10 percent potential upside over the current share price. That target is less than the 52-week high reached last April.

The share price is up more than 33 percent year to date but has faced resistance at $21 in the past month. The stock has outperformed much larger Procter & Gamble (NYSE: PG), as well as the broader markets, over the past six months.

La-Z-Boy

This furniture maker is headquartered in Monroe, Michigan, and it sports a market cap of less than $1 billion and a dividend yield shy of one percent. But note that its P/E ratio is greater than the industry average and the long-term EPS growth forecast is only about four percent. The return on equity is more than 10 percent.

The short interest in La-Z-Boy was more than five percent of the float at the end of February. The number of shares sold short has been growing since the beginning of the year.

However, three of the five analysts surveyed rate the stock at Strong Buy. The consensus recommendation has been to buy shares for the past three months. Their mean price target, or where the analysts expect the share price to go, is more than 13 percent higher than the current share price. That target would be a level the share price has not seen since 2004.

The share price is up about 27 percent year-to-date, though most of that gain came in late February, following a better-than-expected quarterly report. Over the past six months, the stock's performance has been in line with competitor Ethan Allen Interiors (NYSE: ETH), but it has outperformed the broader markets.

Movado

Based in Paramus, New Jersey, this fine watch maker has a market cap near $940 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 February. That was the lowest number of shares sold short in almost a year.

Only two analysts were surveyed, but they both recommend buying shares of Movado. Their mean price target represents more than 12 percent potential upside, relative to the current share price. That price target would be a new multiyear high.

Shares have traded mostly between $36 and $38 since January, but the share price is more than 71 percent higher than a year ago. Over the past six months, the stock has outperformed fellow luxury goods purveyor Coach (NYSE: COH), but underperformed the S&P 500.

Posted-In: Avon Products Coach ethan allen interiorsLong Ideas News Short Ideas Dividends Trading Ideas Best of Benzinga

 

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