TUPPERWARE BRANDS CORP. $80 - New York symbol TUP

TUPPERWARE BRANDS CORP. $80 (New York symbol TUP; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 54.0 million; Market cap: $4.3 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.tupperwarebrands.com) gets 75% of its sales by making plastic food and beverage containers and children’s educational toys. The remaining 25% comes from cosmetics, bath oils and fragrances. Its main brands include Tupperware, Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare and Nuvo.

Direct sales give Tupperware an edge

Unlike Newell (see page 31), Tupperware sells its products through independent dealers instead of stores. This keeps its distribution and marketing costs down. It has 2.8 million dealers in over 100 countries.

Another difference is that Tupperware gets a high 90% of its sales from overseas, including 60% from emerging markets like Indonesia and India. Surging sales from these countries is helping the company offset lower sales in North America and Europe.

Tupperware’s overall sales fell 1.6%, from $2.2 billion in 2008 to $2.1 billion in 2009, mainly because the high U.S. dollar lowered the value of overseas sales. Its sales rebounded to $2.59 billion in 2011, but unfavourable currency rates cut sales to $2.58 billion in 2012. On a constant-currency basis, 2012 sales would have risen 5%. Earnings jumped 74.3%, from $161.4 million in 2008 to $281.4 million in 2012. Earnings per share jumped 94.9%, from $2.56 to $4.99, on fewer shares outstanding.

Tupperware’s long-term debt of $414.4 million is a low 10% of its market cap. It also holds cash of $119.8 million, or $1.88 a share. The company’s strong balance sheet gives it plenty of flexibility to make acquisitions or invest in new products. It also plans to keep repurchasing shares. Since May 2007, it has spent $827.7 million on buybacks.

The stock is up 27% in the past year and now trades at 14.1 times Tupperware’s likely 2013 earnings of $5.69 a share. The company also recently raised its quarterly dividend by 72.2%, to $0.62 a share from $0.36. The new annual rate of $2.48 yields 3.1%.

Tupperware is a buy.

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