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Is Tupperware Brands (TUP) a Great Dividend Stock For 2016?

Tupperware Brands Corporation TUP may not sound like the most exciting company to invest in.  Excitement probably won’t protect you in 2016, though.  With macroeconomic concerns still wreaking havoc on international markets, you’ll need to arm yourself with income to stave off volatility this year.

Tupperware doles out a 4.76% dividend, which isn’t the biggest yield out there in the market.  However, there is a lot of value in TUP’s ability to pay out cash to investors.  Many companies end up lowering their cash dividends or canceling them altogether if their operations are unable to support the cash payout. 

Tupperware has some fundamental metrics which make it look like an attractive buy.  When comparing the company’s forward PE of 13.61 to the industry’s average PE of 22.33, it seems as though TUP is trading at a bargain.  Tupperware’s PEG of 1.24 is also ahead of the industry’s average PEG of 2.09.  TUP has a net margin of 8.14%, which is significantly higher than the industry’s average net margin of 5.69%.  

Now, Tupperware has seen some income deterioration between fiscal 2014 and 2015, but the company’s free cash flows are more than enough to pay out its dividend to investors, and cut down some of its debt as well.  That being said, if Tupperware continues to lose its sales power down the road, there will definitely be some adverse affects to the company’s share price.  Tupperware has been increasing its dividend since 2009, and it hasn’t looked back since.  The cash payout to investors has more than tripled since then.

Analysts have been revising their earnings estimates upwards over the last 60 days for this quarter.  Over that time frame, there have been eight positive estimate revisions.  In the same time frame, there have been no negative revisions made by analysts.  Tupperware has a good track record for beating our EPS consensus estimate.  The company has beaten our estimate in three of the last four quarters.

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