Lacing Up Timberland

As reported here recently, Timberland (NYSE: TBL  ) booted another quarter solidly between the uprights, sending the stock up and me back to my spreadsheet on the company. I wrote about Timberland a few months ago, and to this day, I remain puzzled at how a retailer can continue to perform so strongly year after year. My concern has always been the fickle nature of the retail business. Somehow, though, the folks at Timberland either can predict style trends (less likely) or spend more time focusing on just making good products (more likely) and knowing customers will buy for that reason alone.

The other thing I really like about Timberland is how management has handled its money. Here is a company that's been around for more than 30 years and is still boasting some pretty incredible numbers, as per Yahoo! Finance. Along with an enterprise value of $2.14 billion and an enterprise value-to-EBITDA ratio of 8.31, trailing-12-months numbers include a net margin of 10.18%, an operating margin of 15.6%, return on assets of 23.52%, return on equity of 32.84%, operating cash flow of $179 million, and free cash flow of $149 million.

This may be one of those rare companies that is still growing at a good clip and could be considered value-priced in many ways. Fellow Fool Mike Cianciolo pointed out that Timberland is relatively cheap compared with competitors like Wolverine World Wide (NYSE: WWW  ) and Nike (NYSE: NKE  ) on a price-to-earnings basis. I also see a surprisingly low, though not dirt cheap, enterprise value-to-EBITDA ratio.

Also, neither Wolverine World Wide nor Nike sports margins comparable to Timberland's. Wolverine's net margins are 6.67%, and its return on assets and return on equity are half that of Timberland's. Nike's margins are about two-thirds that of Timberland.

Timberland's well-managed growth has led to some very strong returns for stock market investors -- the stock has beaten the Standard & Poor's 500 over virtually all periods, and there's no sign that things will change.

For more, see:

Fool contributor Lawrence Meyers owns none of the stocks mentioned in this article and reminds you to do your own research before investing.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 490915, ~/Articles/ArticleHandler.aspx, 10/28/2016 6:04:43 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,161.19 -8.49 -0.05%
S&P 500 2,126.41 -6.63 -0.31%
NASD 5,190.10 -25.87 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/28/2016 4:02 PM
NKE $52.02 Up +0.13 +0.25%
Nike CAPS Rating: *****
TBL.DL $0.00 Down +0.00 +0.00%
The Timberland Co. CAPS Rating: ***
WWW $21.39 Up +0.62 +2.99%
Wolverine World Wi… CAPS Rating: *****