24/7 Wall St. » HWD

Dividend Watch: High Silver & Gold Prices No Issue At Tiffany (TIF, HWD, SIG, ZLC)

Administrator — Thu, 19 May 2011 13:58:47 +0000

Tiffany & Co. (NYSE: TIF) has been an amazing stock. Despite the rise in precious metals, the company has so far not been impacted by rising prices when it comes to sell-through rates. It was not even damaged too much from the Japan situation if you just look at its stock performance. Tiffany has shown one more sign of strength now that it has just raised its dividend payout. The prior $0.25 dividend is now jumping to $0.29 per quarter.

When we look at the luxury jewelry market of US-traded shares, Tiffany & Co. stands above companies like Harry Winston Diamond Corporation (NYSE: HWD), Signet Jewelers Limited (NYSE: SIG), and Zale Corporation (NYSE: ZLC). Zale’s has been losing money and is not in a position to pay a dividend, but Signet last had a dividend in 2008 and Harry Winston last paid a dividend in early 2009.

When you annualize this to $1.16 per year and use roughly a $70.00 stock price it comes to a dividend yield of 1.65%. This might not sound like a super-high dividend, but some of that is because Tiffany & Co.’s stock has a 52-week range of $35.81 to $70.26. Its market cap is now $8.9 billion and Thomson Reuters has a consensus price target of only $68.75.

With shares currently above the consensus price target objective, Tiffany’s only real choice was to hike its dividend. Hiking a dividend is much better of a signal to investors than share buybacks. Share buybacks are usually meant to infer that the stock is cheap at the current time, but when companies raise a dividend it is meant to imply that business is going to remain ample to support that payout for years. A company can stop buying stock, but investors generally treat a lowering of dividends with a poor reception.

As far as how $1.16 per year comes out on the math, Thomson Reuters has estimates of $3.32 EPS for its Fiscal January-2012 and $3.79 EPS for its Fiscal January-2013. If Tiffany can come anywhere close to its earnings estimates ahead then it can keep raising its dividends.

JON C. OGG

Filed under: Dividend, Luxury, Retail Tagged: HWD, SIG, TIF, ZLC

Early Bird Pre-Market Analyst Upgrades (ALB, AUXL, BIIB, CBEY, HAIN, HWD, LVS, SYMC, TEVA, TWTC, WBSN, WFMI)

247wallst — Thu, 11 Sep 2008 06:23:19 +0000

These are some of the early bird analyst upgrades and positive calls we are seeing this Thursday morning with more than two hours to the open:

Auxilium Pharma (AUXL) Started as Outperform at Oppenheimer.
Biogen-Idec (BIIB) Started as Buy at Stanford Group.
CBeyond (CBEY) Started as Buy at SunTrust Robinson Humphrey.
Hain Celestial (HAIN) Started as Buy at Jefferies.
Harry Winston Diamond (HWD) Raised to Overweight at Thomas Weisel.
Las Vegas Sands (LVS) Raised to Hold at KeyBanc.
Symantec (SYMC) Started as Buy at B of A.
Teva Pharma (TEVA) Started as Outperform at Oppenheimer.
TW Telecom (TWTC) Started as Buy at SunTrust Robinson Humphrey.
Websense (WBSN) Started as Buy at B of A.
Whole Foods (WFMI) Started as Buy at Jefferies.

Jon C. Ogg
September 11, 2008

Tiffany Rescues Luxury (TIF, NILE, ZLC, HWD)

247wallst — Mon, 24 Mar 2008 08:58:02 +0000

This morning, Tiffany & Co. (NYSE: TIF) reported earnings. While results were down more than 15% from last year, its adjusted earnings of $1.27 EPS ($0.89 after loan and other charges) beat analysts estimates with First Call showing consensus was $1.21 on EPS. Revenues were in-line with expectations at $1.05 Billion.

The net earnings included a $0.22 charge that was made to Tahera Diamond Corp., which has sough creditor protection earlier this year. It also included $0.09 charges for watch discontinuations. One change it is making is its LIFO accounting (last in first out) incost recognition and will use an average cost accounting method.

Its total retail sales were up 4% year over year, and same store sales were down at -1%. Tiffany is maintaining a cautious US-stance for 2008 but noted robust growth internationally. Its 2008 forecast is $2.75 to $2.85, which was above $2.49 or $2.50 consensus estimates. It also put sales up 10% to approximately $3.23 Billion, and estimates were $3.18 Billion.

Tiffany earnings on a net-net basis were great for the current environment. The luxury jeweler wouldn’t have gotten such a great market reward like this morning if this was a year ago. But right now coming close to estimates is good enough. And beating estimates is even better. Shares are up about 14% to $44.00 shortly after the open.

This is also helping some other jewelry players who have seen hard times. Shares of Zale Corp. (NYSE: ZLC) are up 2.5% to $21.81, and its 52-week trading range is $12.48 to $29.22. Blue Nile Inc. (NASDAQ: NILE) is the real winner here with a 10% pop to $51.70, and its 52-week trading range is $38.35 to $106.16. Harry Winston Diamond Corp. (NYSE: HWD) is up less than 1% at $23.65 this morning, and its 52-week trading range is $21.78 to $45.18.

Jon C. Ogg
March 24, 2008