Tiffany & Co. (TIF), Coach, Inc. (COH), Saks Inc (SKS): Luxury, an Investor’s Best Friend?

Page 1 of 2

With the Dow Jones Industrial Average fighting back above the 14,000 mark and individual investors piling their money back into the stock market could we be heading back to the business boom days? If we are back to the boom days, or even if we’re heading there, you can expect a lot more money to be spent on the luxury goods of Tiffany & Co. (NYSE:TIF), Coach, Inc. (NYSE:COH) and in the stores of Saks Inc (NYSE:SKS).

Tiffany & Co. (NYSE:TIF)A Girl’s Best Friend

In the 1949 Broadway production of Gentlemen Prefer Blondes Carol Channing sang a song titled “Diamonds Are a Girl’s Best Friend.” Marilyn Monroe made the song eternally famous with her own rendition, and now girls everywhere crave the diamond. When it comes to diamonds and a long history of great branding, Tiffany’s is a true winner.

Think about the things that you associate with Tiffany’s for a moment. I know that the Tiffany Blue color that graces their bags popped up in some people’s minds; how about Audrey Hepburn’s Breakfast at Tiffany’s? That long history of branding, and the expert finishing on all of their products, are what allows Tiffany’s to stand out and sell their goods at much higher prices.

All of those expensive diamonds add up for investors who have seen five year EPS growth rates at Tiffany’s of 11.4%, with the three year EPS growth rate at an incredible 21.81%. Those aren’t numbers to cry about, but the pricing metrics might be. The P/E ratio is 19.7, higher than the S&P 500 but lower than the industry average of 26.9. Tiffany’s is also trading at 3.3x tangible book; that’s a pretty hefty markup.

The five year average ROI of 13.2% and the 2% dividend yield at Tiffany’s definitely bring the smile back to my face though. That dividend has a five year growth rate of 19.2%, a figure that would be hard to sustain for any company.

How About Those Purses?

I have never been into a Coach store but I have walked past quite a few, and they always seem to be overflowing with people. Are they spending their money on purses or just browsing? Well, looking at growth numbers, you’d be hard pressed to think they weren’t buying like crazy.

Both revenue growth and EPS growth are in the double digits over the one, three and five year ranges. Sustaining that type of growth over five years is quite a difficult thing to do, especially when you’re selling a luxury product in down-times. The three year revenue growth rate sits at 11.74% while the three year EPS growth is an incredible 18.36%.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!