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The Recently Recommended Monthly Stock Special
Recently Recommended

The recently recommended company is *L Brands Inc. (LB)...

Comparison LB (recently recommended stock of the month) vs SP500 (by Vanguard SP500 Index Fund) in the last 10 years.

Company Information:

L Brands Inc. (LB) is an American fashion retailer based in Columbus, Ohio, founded by Leslie H. Wexner in 1963. The company operates in three segments: Victoria's Secret (which includes Victoria's Secret PINK) the specialty retailer of women's intimate and other apparel with fashion-inspired collections, prestige fragrances, celebrated supermodels and world-famous runway shows. Bath & Body Works, which is a specialty retailer of home fragrance and personal care products, including shower gels, lotions, soaps and sanitizers, and Victoria's Secret and Bath & Body Works International, which includes the Victoria's Secret and Bath & Body Works company-owned and partner-operated stores outside of the United States and Canada. Its distribution channels include about 3,070 stores and online. Its current total market capitalization of $19.0 billion makes LB a large cap stock (large capitalization). It is considered a solid and well diversified business with wide economic moat and durable competitive advantages over rivals, and the firm also enjoys a solid corporate culture.

 

According to Yahoo! Finance, consensus estimates call for the company to earn about $3.69 per share this year, up from $3.57 per share in 2015, and to go to net about $3.89 per share in 2017. L Brands Inc. has paid dividends to investors since 1970, and during the past 5 years it has increased its dividends at an average rate of 10.3%. Its quarterly payment of $0.60 per share currently provides a yield of 3.60%. The value of dividends reinvestment: a hypothetical investment in L Brands has grown cumulatively (including dividends reinvested) 122,838.51% during the past forty years. However, if you remove dividends reinvestment from the equation, the same hypothetical investment would have grown only 38,734.52% during the same period of time. Its Price to Earnings ratio (a measure of valuation) of 16.9 is 29.6% below its industry average, and according to Morningstar, the stock is trading 12.6% below its Fair Value Estimate, making it attractive for investors with a long-term investment horizon.

 

From the chart’s perspective, LB looks attractive, trading 33.2% below its two-year high, while it is forming a long price consolidation pattern between $100 and $60 approximately, in which $60 is acting as a technical support level. The actively managed no-load mutual funds Vanguard PRIMECAP Inv. (VPMCX) and Vanguard Wellington Inv. (VWELX) are major shareholders of LB, holding 2.97% and 1.16% of its shares respectively. LB’s main competitors in the world are TJX Companies Inc., Industria De Diseño Textil SA ADR and Fast Retailing Co Ltd ADR. LB’s dividend re-investment plan charges no fees for cash investing, dividend reinvestment, safekeeping or termination of the plan. The company offers investors the opportunity to own a leading company with a strong record of delivering shareholder returns and solid strategic execution. With the stock being fundamental and technically attractive, it may offer an entry point for investors with a longer-term investment horizon.

 

 

 

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