What Makes VF One of America's Best Companies

VF (NYSE: VFC  ) is one of the world's largest apparel companies. Its flagship brands include The North Face, Lee Jeans, Wrangler, Jansport, and Vans shoes. Over the past year, the company's stock has risen 11% due to strong sales and earnings growth. Recently, VF made headlines when it announced a bid for Billabong, the Australian board-sports apparel brand.

The company's two largest product groups are its outdoor and action sports group and its jeanswear group. Last quarter, outdoor and action sports -- which includes the North Face and Vans brands -- accounted for 59% of total revenue while jeanswear brought in 23%. The company is currently focusing on expanding its brand portfolio and on generating more revenue internationally. The five-year plan is for 45% of all revenue to come from overseas. Here's what's making this stellar grower tick.

The case for VF
VF has succeeded by focusing on both its customers and its shareholders. Customers have fallen in love with the company's brands, in particular, its North Face outdoor brand. In 2000, when VF acquired The North Face, the brand made $218 million. Now VF has a goal of $3.5 billion of revenue from North Face by 2015. That fact alone highlights the work that VF has done to integrate brands into consumers' lives, and shows how successful that project has been.

Unsurprisingly, investors have been big winners with VF. Revenue has grown at an average rate of 9% over the last five years. Over that same time frame, investors have been rewarded with a 128% return. That's only going to keep getting better, as VF focuses on making its businesses more profitable. What some analysts are seeing as a slowdown in revenue growth is actually an increase in profitability. VF is closing underperforming stores, and integrating its newly acquired Timberland brand.

As profitability increases, the company should have more to spend on new acquisitions -- like Billabong, which it's currently investigating -- and giving more back to shareholders. Right now, the company's five-year average dividend is hanging out at 3.2%, but that could jump as more money flows into the coffers.

Hopefully, VF will also be using some of that cash to increase the good work that it's doing in the community as well. The company's most commendable project is its VF 100 Program, whose reward is twofold, supporting both employees and the world at large. VF gives $1,000 to 100 charitable organizations chosen by the 100 employees who log the most volunteer hours over the course of a year. As the company grows, I'd love to see that expanded.

Employees seem to be happy with the company, as well. VF has a 94% recommendation rate on Glassdoor.com, with 100% of reporting employees approving of the CEO, Eric Wiseman. Wiseman took the CEO role in 2008, after 13 years with the company. Right now, Wiseman is focusing on 2015, when he hopes VF will  hit $13 billion in revenue. Not bad for a company that started life over 100 years ago as a mitten manufacturer.

Areas for improvement
Remember the 1970s? That's when VF started increasing its dividend -- and it hasn't stopped for one single year since then. The company has grown payouts for 40 years, and they're forecast to keep growing. To be honest, I don't see any reason to worry about VF. If you're the kind of person who needs bad news, maybe you can be worried that purchasing Billabong is a bad idea. The other potential buyers who looked at the company's books certainly thought it was. But apart from that, I'm stumped for good reasons not to buy this company.

Foolish bottom line
Not only is it a solid company, VF is also trading at a P/E well below the apparel industry average. In short, VF is a good, cheap, consistent dividend-paying stock. The short interest is only 3% of the float, which is indicative of how solid this company is. I would love to hear dissenting opinions, but so far, I haven't found anything.

VF is growing its revenue, buying good brands, increasing its payout to investors, and giving back to the community. This is one of the best -- if not the best -- apparel companies in business right now.

Click here to read about the rest of The 25 Best Companies in America.

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