As is the case for many international companies, Asia is the place to be. Indonesia is not only the world’s largest Tupperware market, but also the fastest growing, with a staggering 36% increase in sales. China and India are also providing growth in the double digits, both above 20%. Overall, the company increased sales by 8% year over year for the second quarter .
Strength in emerging markets is not only good for the company, but beneficial for local development as well. According to a recent article in the Herald Tribune, Tupperware’s business model has contributed to the economic empowerment of women in places like India. The business model allows Indian women to do business from their homes, avoiding India’s often poor sales infrastructure.
As the company’s sales force in developing markets consists largely of poorly educated women, Tupperware gives underprivileged females a shot at economic independence. But more than ‘just’ allowing women to better provide for their families, economic independence contributes to the social development of females in India, a place in which this process is so sorely needed. This need has become particularly apparent in recent stories coming out of the subcontinent. Whether or not this is the company’s intention, it is actually contributing to social change .
Valuations and metrics
Tupperware currently trades at 17.63 times trailing earnings, which isn’t too bad at all compared to the 22.15 industry average. Avon Products, Inc. (NYSE:AVP) trades at a negative ratio, and Newell Rubbermaid Inc. (NYSE:NWL) at 19.6. The stock has a very healthy return on equity of 64.4% and its operating margin is way ahead of the competition, as is its quarterly revenue growth. Its debt is more or less under control, with a long-term debt-to-equity ratio of 86.50.
The bottom line
There’s a lot to like about Tupperware. The iconic company is able to grow its top and bottom lines regardless of the macro-economic backdrop, and its stock has performed very well. But what separates Tupperware from most companies is the important work it does empowering women across the globe by allowing them to pursue economic independence. As such, it is not only an economically profitable company, but it appears to be a morally justifiable investment as well.
The article Global Growth and Local Development: The Case for Tupperware originally appeared on Fool.com and is written by Daniel James.
Daniel James has no position in any stocks mentioned. The Motley Fool owns shares of Tupperware Brands (NYSE:TUP) and has the following options: short October 2013 $75 calls on Tupperware Brands.
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