February 5, 2009 - Tupperware Brands Corp. (TUP-NYSE) operates as a direct seller of various products across a range of brands and categories through an independent sales force. The company manufactures and sells kitchen and home products, and beauty and personal care products. It offers preparation, storage, and serving solutions for the kitchen and home, as well as kitchen cookware and tools, children's educational toys, microwave products, and gifts under the Tupperware brand name in Europe, Africa, the Middle East, Asia Pacific, and North America.

It offers beauty and personal care products under the Armand Dupree, Avroy Shlain, BeautiControl, Fuller, NaturCare, Nutrimetics, Nuvo, and Swissgarde brand names.

The company sells its Tupperware products directly to distributors, directors, managers, and dealers; and beauty products primarily through consultants and directors. As of December 27, 2008, the Tupperware distribution system had approximately 1,800 distributors, 58,700 managers, and 1.0 million dealers; and the sales force representing the Beauty businesses totaled 1.1 million. It was formerly known as Tupperware Corporation and changed its name to Tupperware Brands Corporation in December 2005. The company was founded in 1996 and is headquartered in Orlando, Florida.

TUP, in early 2009, was $10.91 a share after collapsing from $45 in early 2008. It hit a 52 week high of $50.20 on December 5, 2009. Within 9 months, the stock was up 358%. Any stock that can rebound like that deserves a look.

The collapse in early 2009 was due to the general market's total surrender, not because the company's earnings were faltering. In fact, earnings were strong. In 2006, they were $1.54, then $1.87, followed by $2.56. Analysts believe 2009 finished at $2.90 and see $3.44 for 2010. No wonder the stock didn't stay down for long.

What's interesting about Tupperware is that almost all of its profits come from international sales. A weak dollar helps. Further, a majority (56%) of its third quarter profits were from local currency sales growth in emerging markets where sales were up 6% to 8%. In more established markets, revenues only increased by 1% to 2%. Foreign currency plays a large part in Tupperware's bottom line. If the dollar strengthens dramatically, it could have an adverse affect on profitability since foreign sales are so dominant. The U.S. market was only 14% of sales in 2008 and 10% of operating profits. Europe was 36% of sales, 44% of operating profits; Asia Pacific 15% and 23%.

Emerging markets offer better opportunities for TUP than estabilished ones. First, most sales are done by women, going door to door or hosting Tupperware parties. Women in emerging countries usually don't have as many work opportunities and find TUP an appealing choice. Second, many emerging market countries have fewer central market places or retail shopping centers which means direct selling is the way many consumers buy products.

Analysts believe all three regions (Europe, Asia/Pacific and North America) are performing well. Germany in particular has seen an improvement in sales since the government is encouraging more consumer spending. Analysts predict 2009's sales finished at $2.12 billion, only a little below 2008's $2.16 billion. Next year, they see an increase of 12% to $2.37 billion.

The board of directors boosted the dividend to $1.00 a share for 2009, up from 88 cents or13.6%, the first time since the company went public in 1996. That puts the yield at 2.1%. Ex-dividend date was December 2, 2009, and the pay date was January 3, 2010.

The company has almost $120 million in cash. As sales increase, cash flow should improve, suggesting that further hikes in the dividend may be forthcoming or paying off more debt (it paid off $80 million by September of 2009) or buying back more shares. The board's goal was to buy $40 million of stock in the fourth quarter of 2009 or about 800,000 shares. There are 63.56 million shares outstanding.

More numbers: Market cap is $3.04 billion. Return on equity was a noteworthy 27% in the last 12 months. Operating margin was 12.51% and Profit margin was 7.75%. Book value is $9.59. Price to book is 5. Beta is 1.8. Institutions own 87.4% of the stock, insiders .88%. The $1.00 dividend takes 35% of earnings to pay.

Investors love this stock, now. They dumped it early in 2009, along with everything else when the world seemed to be ending. Valuations have gone to the far end of the scale with a relatively high P/E ratio and Price to book. And the stock recently hit an all-time high of $50.20. New investors may want to curb their enthusiasm for a bit, after they do more research. The stock's high beta suggests that volatility will be part of owning these shares and that a better entry point may appear.

- Company Web site: www.tupperwarebrands.com

- Ted Allrich