Earnings have more than doubled over the decade and the dividend has been increased in each of the last four years. The shares yield nearly 3.2%, however, the price to earnings ratio is around 23. So, the stock is most appropriate for growth and income investors. Income investors, however, might want to keep the name on their watch lists.
A real risk
For really aggressive investors, Herbalife Ltd. (NYSE:HLF) might be the best bet. The company sells health food and personal care items. It is currently facing government scrutiny over accusations from short sellers that it is little more than a Ponzi Scheme. That’s the big risk.
However, the company continues to perform well despite the shadow of the investigation of its business practices. And, the company’s historical growth has been nothing short of impressive. Over the past decade, revenue has gone from $1.2 billion to $4.1 billion. Earnings have gone from $0.35 a share to over $4.00 last year, and the PE is just about 11, with a yield of around 2.7%.
The downside risk is obviously large if the company gets pegged as a Ponzi Scheme, so most should stay away. However, more aggressive growth and income investors willing to bet the company is legit should find this high-risk stock very appealing.
More to be done
Avon Products, Inc. (NYSE:AVP) has a great deal of work to do before it is back on track. It has a good story, but investors appear to be too optimistic at this point. Tupperware Brands Corporation (NYSE:TUP) is probably a better option for the growth minded. For really aggressive investors, Herbalife Ltd. (NYSE:HLF)’s government investigation appears to be dragging down what might be a solid business — if it gets a clean chit.
The article Will Admitting a Mistake Help This Specialty Retailer Improve? originally appeared on Fool.com and is written by Reuben Brewer.
Reuben Brewer has no position in any stocks mentioned. The Motley Fool owns shares of Tupperware Brands and has the following options: long January 2014 $50 calls on Herbalife Ltd. (NYSE:HLF). Reuben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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