Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?

One thing's for sure: You'll never discover truly great investments unless you actively look for them. Let's discuss the ideal qualities of a perfect stock, then decide if Tupperware Brands (NYSE: TUP) fits the bill.

The quest for perfection
Stocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:

  • Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it's certainly a better sign than a stagnant top line.
  • Margins. Higher sales mean nothing if a company can't produce profits from them. Strong margins ensure that company can turn revenue into profit.
  • Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management's attention. Companies with strong balance sheets don't have to worry about the distraction of debt.
  • Money-making opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
  • Valuation. You can't afford to pay too much for even the best companies. By using normalized figures, you can see how a stock's simple earnings multiple fits into a longer-term context.
  • Dividends. For tangible proof of profits, a check to shareholders every three months can't be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let's take a closer look at Tupperware Brands.


What We Want to See


Pass or Fail?

Growth 5-Year Annual Revenue Growth > 15% 12.5% Fail
  1-Year Revenue Growth > 12% 8.1% Fail
Margins Gross Margin > 35% 66.7% Pass
  Net Margin > 15% 9.8% Fail
Balance Sheet Debt to Equity < 50% 59.4% Fail
  Current Ratio > 1.3 1.70 Pass
Opportunities Return on Equity > 15% 31.6% Pass
Valuation Normalized P/E < 20 18.95  Pass
Dividends Current Yield > 2% 2.1% Pass
  5-Year Dividend Growth > 10% 3.6% Fail
  Total Score   5 out of 10

Source: Capital IQ, a division of Standard and Poor's. Total score = number of passes.

Tupperware locks up a midrange score of 5. When it comes to investing in what you know, it's hard to ignore the storage container giant that nearly everyone is familiar with.

Mention Tupperware, and many people automatically think back to images of the 1950s, with Tupperware parties hawking products to help people store leftovers. But these days, Tupperware is a lot more. The company has expanded into new product lines like beauty and personal-care products, taking on Avon Products (NYSE: AVP) on its home turf. More importantly, Tupperware has built a huge international presence; the majority of its sales now come from overseas.

Still, Tupperware doesn't have free reign over its market segment. Newell Rubbermaid (NYSE: NWL) makes competing storage products, although from a financial perspective, its stock falls short of Tupperware's in most respects. Clorox's (NYSE: CLX) Glad subsidiary, as well as S.C. Johnson's Ziploc, provide disposable products that also serve the same function as Tupperware.

Tupperware is a good example of a less-than-exciting company with phenomenal growth potential. If the company can follow through on its emerging-market growth, then Tupperware could eventually become perfect for every occasion.

Keep searching
No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you'll go a long way toward improving your investing prowess and learning how to separate out the best investments from the rest.

Click here to add Tupperware Brands to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Finding the perfect stock is only one piece of a successful investment strategy. Get the big picture by taking a look at our 13 Steps to Investing Foolishly.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned in this article. The Fool owns shares of Tupperware Brands. Clorox is a Motley Fool Income Investor recommendation. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.