The luxury goods industry is massive and growing at a healthy clip. In just five years, the global luxury goods market is expected to top $374 billion, according to Transparency Market Research.

Additionally, the global luxury index is outperforming the S&P 500 so far this year -- albeit only slightly -- with a 1.64% gain. Jewelry is one of the top growth drivers in this industry today. With annual sales north of $4 billion, Tiffany & Co (TIF) is a pure play investment in this space that will add some bling to your portfolio.

Source: The Motley Fool

Diamonds are an investor's best friend
Tiffany & Co. is a leading global luxury brand with a rich history of shareholder returns. The New York based jeweler has been around for more than 170-years, which is nearly a century longer than its closest rival, Harry Winston. Tiffany has established itself as an iconic American luxury brand during that time, which enables the retailer to charge premium prices without a backlash from customers.

It's hardly surprising, then, that Tiffany boasts some of the richest margins in the business. Healthy profit margins are a trademark of many luxury goods companies and Tiffany & Co is no exception.

During fiscal 2014, for example, the high-end jeweler generated a gross profit margin of 59%, compared to an average gross margin of just 35% for the industry. And unlike most luxury retailers today, Tiffany pays an annual dividend of $1.52 per share. The stock currently boasts a dividend yield of 1.7%, which is in line with the S&P 500's average yield.

Despite the luxury retailer's strong brand equity and impressive ability to generate loads of cash, the stock has taken a beating this year. Investors have pushed shares of Tiffany down by more than 15% year to date because of slowing sales in the U.S. and weakness in Japan. However, with the stock now trading around $89, or near the low end of its 52-week range, I believe this creates a buying opportunity for patient investors.

Growing overseas
In fiscal 2014, the Americas accounted for as much as 48% of Tiffany's worldwide net sales. However, the company is expanding its footprint in key markets outside of the U.S. today, including China, where the retailer currently operates 17 stores. That compares to 56 Tiffany locations throughout Japan. This should help drive future earnings growth, particularly as China's upper and middle classes continue to grow. Tiffany plans to add upward of 15 new stores this year, with the bulk of those planned in the Asia-Pacific region.

Yet, growing its global luxury customer base is only part of the Tiffany story. The retailer is also looking to make its existing stores more profitable throughout 2015 by relocating certain stores to busier areas and renovating others.

All things considered, Tiffany & Co. is a staple in the luxury market and a brand that has outlasted competitors for more than a century. For these reasons, I think the recent pullback in the stock creates an opportunity for investors to own a pure play luxury stock at a discount to its future potential.