By Dr. Thanh Bui, Camarda Chief Fundamental Analyst, with Dr. Jeff Camarda
Tupperware Brands Corp is a direct selling consumer products company. It sells food preparation, storage, and serving products as well as cookware and microfiber textiles under the Tupperware brand name. For 2016, Tupperware products represented 75.3% of income, with beauty and personal care products making up most of the rest at 24.7%. Revenue is globally diversified, with 34% from Asia Pacific, 25% from Europe, 25% from North America, and 16% from South America. The company has strong cash flow. Return on assets increased in 2016, and its profitability is higher than that of peers and the market with current return on equity of 76.5% vs. 16.3% for peer companies and 21.3% for the broad market. The company pays a dividend yield of 4.6% with a payout ratio of 61%, leaving plenty of retained earnings for growth. 10 out of 11 of its directors are independent, implying sound, objective oversight. The Board recently approved the purchase of Tupperware for Columbia, and we believe it to be an outstanding bargain, the essence of our value investing philosophy.
For Columbia, the Board also approved the purchase of Hewlett Packard, Gilead Sciences, MSG Networks, Argan, SP Plus, Time Warner, Wabash National, Usana Health, Gap, The Michaels Companies, Innoviva, Applied Materials, Ross Stores, and Lam Research.
For Viking, the Board also approved the purchase of Allstate, Celanese Corp, Carnival, General Dynamics, NextEra Energy, and Aflac (just don’t call us quacks!).
For Strong Stock, the Board also approved the purchase Magellan Midstream Partners, L.P.