Saturday, March 9, 2013

Why Coach Is Poised to Bounce Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, luxury handbag maker Coach (NYSE: COH  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Coach and see what CAPS investors are saying about the stock right now.

Coach facts

Headquarters (founded)

New York, N.Y. (1941)

Market Cap

$14.1 billion

Industry

Apparel, accessories, and luxury goods

Trailing-12-Month Revenue

$4.9 billion

Management

Chairman/CEO Lew Frankfort

President/COO Jerry Stritzke

Return on Equity (average, past 3 years)

50.9%

Cash/Debt

$858.7 million/$22.7 million

Dividend Yield

2.5%

Competitors

Michael Kors Holdings (NYSE: KORS  )

Ralph Lauren (NYSE: RL  )

Tiffany (NYSE: TIF  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 3,000 members who have rated Coach believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star RockyMountainMan, tapped Coach as a particularly solid income opportunity:

Strong [free cash flow] that supports dividend increases. Currently around [30%] payout ratio so [Coach] can continue to increase the dividend which will put a floor under the stock. [Coach] will pay you while you (to the tune of 3% -- bonds anyone?) wait for the growth in China to kick in. Having a stellar balance sheet with virtually zero debt is what I like to see in companies I own. [Coach] is near the bottom range of its past P/E.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Coach may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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