The North Face jackets. Timberland boots. SmartWool socks. Vans shoes. What do all of these have in common?

They are all products owned by VFCorporation (NYSE:VFC), and combined with other outdoor and action products, they brought in over $7.5 billion in sales last year. The company is a clothing conglomerate with a bevy of steady and reliable brands.

Pictures of the company's The North Face, Vans, and Timberland brands.

Image source: VF Corporation.

And yet, over the past 18 months, Wall Street has hated this stock. Shares have underperformed the S&P 500 by 38 percentage points. While that's discouraging, it also presents a unique opportunity: the chance to buy a safe and growing dividend that's now yielding over 3%. Here's why it's a pretty good deal.

What's to blame for the drop? The death of malls

Despite a strong roster of brands, VF isn't immune to the death of malls in America. As e-commerce gobbles up more and more of the retail pie, companies selling products via the mall have suffered. And slower traffic alone isn't the only problem: As retail stores adjust to this new reality, they are ordering far less inventory, magnifying the effects on VF's wholesale business.

While growth was slow heading into 2016, it was at least positive. But that trend reversed last year, with the wholesale business declining by almost 3% as fewer and fewer people were shopping at malls.

That, combined with some goodwill write-offs and the decision to restructure the company's lucy branded women's clothes with The North Face division, combined to bring earnings down 8% last year.

The silver lining: weakness comes from sales channels, not the brands themselves

What we have here, then, is a business in transition. The old forms for selling products are drying up, and VF needs to transition into new lines. Already, it has been doing that. The company's direct-to-consumer (DTC) channel includes both VF-operated stores and e-commerce. And it has been growing steadily -- annualized at over 11% -- for the past five years.

Compare how the wholesale and DTC lines have diverged.

Data source: Annual reports. 

Just as importantly, international customers can't seem to get enough of VF's brands. Back in 2014, the company counted $3.6 billion in international sales. Last year, that figure was $5.4 billion -- a 50% jump in just 24 months. 

Of course, the problem is that the wholesale business still makes up over 70% of all sales. Over time, though, I believe two things will happen. First, more and more sales will migrate to the DTC channel -- which is not only more reliable, but offers higher margins. Second, I believe the wholesale business will eventually stabilize, making the gradual transition to DTC easier on shareholders.

Collecting a fat dividend all the while

In the meantime, investors buying in today get the benefit of a 3% dividend yield that is very safe. When it comes to dividends, the most important thing to keep an eye on is free cash flow (FCF) -- the amount of money a company puts into its pocket every year, minus capital expenditures. It is from FCF that dividends are paid, and investors never want to see the latter outstripping the former.

Data source: Annual reports.

While the company's FCF has been variable from year to year, management has never used more than 60% of it to pay the dividend. And last year, it used less than half. That means that the company's 3.1% yield is very safe and has lots of room to grow.

In fact, VF has raised its dividend for 44 consecutive years. That means while you're getting a 3.1% dividend yield this year, it could be substantially higher -- relative to today's purchase price -- in a decade.

For instance, investors who bought shares in 2007 got a 2.5% dividend yield. But based on the original purchase price back then, the dividend they are getting now is yielding 7.6% based on their original purchase price.

That's why income investors should look carefully at buying shares of VF. The company owns valuable brands that have proven themselves over the years and are growing in importance internationally. While the transition for U.S. wholesale to DTC will be painful, patient investors could be rewarded handsomely.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.