Tupperware Brands Corp. $23 – New York symbol TUP

TUPPERWARE BRANDS CORP. $23 (New York symbol TUP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 62 million; Market cap: $1.4 billion; Price to- sales ratio: 0.7; WSSF Rating: Above Average) makes plastic food and beverage containers, as well as beauty products. It sells its products through a network of independent dealers instead of traditional retail stores. This keeps its marketing costs low. Tupperware tends to do well when the economy slows. That’s because many people become Tupperware dealers as a way of supplementing their income. Demand for food storage containers also tends to rise during downturns, as more people eat at home instead of in restaurants. Tupperware gets more than 90% of its profits from outside of the United States. This makes it particularly vulnerable to a rising U.S. dollar, which hurts the contribution of its international operations. Still, Tupperware’s well-known brand continues to spur sales in emerging markets, such as China and India. The company’s long-term debt of $588 million is a manageable 42% of its market cap. It also holds cash of $146.4 million, or $2.36 a share. Tupperware will probably use this cash to pay down debt instead of buying back stock. The $0.88 dividend appears secure, and yields 3.8%. The stock now trades at 9.1 times its likely 2009 earnings of $2.54 a share. Tupperware is a buy.