Tupperware Brands Corporation is listed on the New York
stock exchange (NYSE) with ticker TUP.

Company Background (source Yahoo Finance):

Tupperware Brands Corporation operates as a
direct-to-consumer marketer of various products across a range of brands and
categories worldwide. The company is engaged in the manufacture and sale of
preparation, storage, and serving solutions for the kitchen and home, as well
as a line of cookware, knives, microwave products, microfiber textiles, water
related items, and toys and gifts under the Tupperware brand. It also
manufactures and distributes beauty and personal care products, including skin
care products, cosmetics, bath and body care, toiletries, fragrances, jewelry,
and nutritional products under the Armand Dupree, Avroy Shlain, BeautiControl,
Fuller, NaturCare, Nutrimetics, and Nuvo brands. Tupperware Brands Corporation
sells its products directly to distributors, directors, managers, and dealers.
The company was formerly known as Tupperware Corporation and changed its name
to Tupperware Brands Corporation in December 2005. Tupperware Brands
Corporation was founded in 1996 and is headquartered in Orlando, Florida.

### Analysis

**Current Yield and Dividend Growth:**

Tupperware currently pays a dividend of USD 0.68 per
quarter for a USD 2.78 annual dividend. At the close of market on Tuesday, May 13th
TUP’s price per share was USD 85.40. This gives the stock a current dividend
yield of 3.26%. Normally I look for a dividend yield of at least 3%, so I will
be satisfied with this dividend yield from TUP. In 2004, Tupperware paid an
annual dividend amount of USD 0.88 per share. The dividend trend has been a
flat until 2008. After 2008 the dividend has begun to grow strongly, in 2013
the dividend was 2.48. This gives TUP a 5 year annual compound dividend growth
rate of 20.30%. Tupperware has increased its dividend now 5 years in a row, so TUP
is the dividend challenger (U.S. Dividend Champions by David Fish). Tupperware´s
dividend growth rate had been very high on last 3 and 5 years, 30.50% and 20.30%.
1 year growth rate is a huge 60.90%. However, it is unlikely that this kind of
trend will continue. Tupperware normally pays dividend in January, April, July
and October.

**EPS Growth:**

Tupperware's EPS has grown an average of 15.09% over the
past 5 years and 13.56% in the past three years. Last year the growth of EPS
was excellent 51.17%. Tupperware's EPS of development in the past years seems
to be very good. Analyst estimates for 5 year earnings growth rate per annum
are 12% (http://finance.yahoo.com/q/ae?s=TUP+Analyst+Estimates).
It's in my opinion an optimistic estimate and if that will happen, investors
can be very satisfied.

**Net Income:**

Tupperware's net income has increased by an average of 11.18%
over the past 5 years and 6.72% in the past three years. Last year net income grew
42.07%. The net income trend looks similar to the EPS trend.

**Revenue Growth:**

**Outstanding Shares:**

The past 10 years, Tupperware's amount of shares has
risen almost every year until 2010. After this, the number of shares has
started to decline. I like this new trend, because less shares outstanding, my
shares are giving me a bigger portion of the earnings.

**Payout Ratio:**

**ROE:**

**Net Profit to long term debt:**

**Value**

To find out share fair value I mainly use these methods.
(http://www.passive-income-pursuit.com/search/label/stock%20valuation%20method).

**Graham Number:**

The Graham Number valuation method was conceived by
Benjamin Graham, the father of value investing, and calculates the maximum
price one should pay for a company given the earnings and book value. Tupperware
has earned USD 5.17 per share in the last twelve months and has a current book
value per share of USD 5.02. The Graham Number is calculated to be USD 24.17,
suggesting that TUP is overvalued about by 250%.

**Average P/E Ratio:**

Tupperware`s current P/E is 16.42, which are lower as
historical 5 years average high (18.50) and higher as 5 years average low (10.82). By calculating using estimated EPS USD 5.71
for year 2014 and the average 5 years low P/E ratio (10.82) shares fair value
will be USD 61.79. Calculating with 5 years average P/E ratio (14.66), fair
value will be USD 83.71.

**Average Dividend Yield:**

Tupperware`s current annual dividend is USD 2.78. At the
close of market on Tuesday, May 13th TUP’s price per share was USD 85.40. This
gives the stock a current dividend yield of 3.26%. Average 5 years high
dividend yields has been 4.13%. That dividend yield gives share fair value USD 67.36.
Calculating with 5 year average yield 2.57%, the fair value will be USD 108.04.

**Average P/S Ratio:**

Tupperware`s current P/S ratio is 1.66 with revenue
estimates for the year 2014 (2.71B). Average 5 years low P/S ratio is 0.95. By
calculating using the estimated revenue for the year 2014 and the average 5
years low P/S ratio fair value will be USD 48.66. By calculating with 5 year
average P/S ratio (1.28), fair value will be USD 65.69.

**Discounted Cash Flow:**

Discount Rates | 8% | 9% | 10% | 11% | 12% |

NPV of Future EPS | $97.98 | $87.52 | $78.71 | $71.24 | $64.86 |

**Dividend Discount Model:**

Discount Rate | 8% | 9% | 10% | 11% | 12% |

NPV of Future Dividends | $86.01 | $75.68 | $67.07 | $59.86 | $53.76 |

**Future Price:**

Tupperware has EPS 5.17 (ttm). When I calculate Tupperware`s
future price with the analyst estimate for 5 years EPS growth (12%) and using the
low P/E ratio last 5 years, I come from price USD 98.58. That would give about 13.87%
upside for TUP´s current price. By calculating using the average last 5 years
P/E ratio, I come from price USD 133.55.

**Conclusion:**

Tupperware Brands has expanded to almost 100 countries
around the world under its seven brands Tupperware, Avroy Shlain,
Beauticontrol, Fuller, NaturCare, Nutrimetics and Nuvo. Tupperware`s growth
development in past years looks good to me, in the last 10 years there are two
years, when TUP’s EPS went down (2005 and 2012). Tupperware`s payout ratio is now
48.00%, as it has almost always been below 50% in the past 10 years. So there
will be a good reserve for dividend increases in the future. Net profit to long
term debt is nowadays below 5, what I normally like to see. Based on my value
calculation, TUP is now trading higher as its average low P/E ratio (10.82) and
also higher as its average P/E ratio (14.66). When I look the average dividend
yield (2.57%), I see that TUP is now trading below that price. To compare an average
P/S ratio (1.28), I see that, TUP is now trading over of those prices. My
calculation of discounted cash flow gives price USD 78.71 for the net present
value, meaning that TUP is overvalued by 7.87%.
Based on the dividend discount model, Tupperware is worth USD 67.07,
meaning it's currently overvalued by 26.6%. Overall I feel that Tupperware is
overvalued at current levels. However, I will keep an eye on TUP and if the
stock price will fall close to the 78.00 USD perhaps I will buy some TUP to my
portfolio.

Disclosure: I
don't own any shares of TUP.

Interesting pick for analysis, DH. I dont own TUP either, but will need to consider it once it gets down to better valuation.

ReplyDeleteBest wishes

R2R

Wow I never looked into TUP, I will add it to the watch list. Solid Brand name and a pretty good divi yield. Payout ratio also good. Nice Call !

ReplyDeleteThanks for sharing this analysis. TUP has been on my watch list a long time ago and I haven't really looked at it or considered it for a while now. Thanks for bringing back to my attention.

ReplyDeleteNice analysis. Have you also looked at NWL (Rubbermaid)? It provides solid competition for TUP, is bigger, but has a lower dividend yield. The pay out ratio is lower, and the dividend has increased in solid fashion for the last 5 years.

ReplyDeleteBoth are good stocks and competitors with each other.

- Dividend Gremlin

Hi Dividend Gremlin

DeleteI'm not familiar with NWL, maybe I need to get better acquainted with the company, when I have time.

Thanks for stopping by!

DH

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