With Marriage Rates Decreasing, These Companies Are Engaging
Tyler is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Marriage rates in America are low and dropping. On average, men aren't marrying for their first time until their 29th birthday! In fact, marriage rates have dropped so dramatically that approximately 50% of all adults are single as opposed to 28% ten years ago. Due to the dramatic avoidance or postponement of marriage, are jewelry companies suffering?
Harry Winston (NYSE: HWD) is one of the few jewelers whose fame and reputation was built by a single individual. Harry Winston was born on March 1, 1896. Legends are told that by age twelve Winston recognized the potential and bought a 2 carat emerald for twenty five cents. Two days later, he sold that same emerald for $800. Winston's company currently shows a 2.8% FCF yield. Although revenues for the past several years have been very sporadic, its stock has still performed well. After a rough spring, Harry Winston's stock ended up increasing by 39%. Capital expenditures increased by 33% as the company focuses on growing its twenty locations globally; eight of those are in the United States.
Signet Jewelers (NYSE: SIG) is a major company that owns both Jared's and Kay Jewelers. In January of 1950 the company was formed in England and Wales, but since then has developed over 1,400 stores in the United States alone. Like Harry Winston, revenues have been unpredictable for the past several years. With a 9% increase in revenues through 2012, and a stock that gained nearly 36%, the company is still looking to expand. In 2012, capital expenditures increased a solid 69%. It appears as though Signet is slightly cheaper than Harry Winston as it shows a 3.8% FCF yield.
Although the stock lost about half of its value in the past quarter; Zale Corporation (NYSE: ZLC) still ended the year with a 55% increase. Zales was founded in 1924 and has grown into 1,870 stores throughout North America. Zales made its Initial Public Offering in 1957, although the company didn't break the $1 billion revenue mark until 1980. After a 7% increase in revenues through 2012, the company brought in nearly $1.9 billion. With only a $140.4 million market cap, its FCF yield is 26.4%. Zales capital expenditures also increased, like the rest of these companies. They were up 33% in 2012. All of these companies seem to be focused on growth, despite the decreasing number of marriages and postponed decisions from the males.
Tiffany (NYSE: TIF) boasts the largest market cap of all jewelers at $8.1 billion. Founded in 1837, Tiffany has trademarked a particular shade of blue that is used in all its advertising and packaging. With 9,800 employees, Tiffany boasts 5,944 Jewelry Stores. In 2012, Tiffany generated over $3.6 billion in sales. Although Tiffany experiences more revenues than any other jeweler, its shareholders have experienced the worst results. The company's stock increased less than 7% in 2012, and posts a small FCF yield of .5%. Despite Tiffany's market leading position, capital expenditures increased more than any other jeweler, rising 88% in 2012. The chart below shows what these companies have done in the past year.
Data by YCharts
The Foolish Conclusion...
Despite marriages decreasing over the past several years, these companies all seem to be not only surviving, but thriving. All of these companies should draw at least some interest from growth investors based on their performance. However, bargain investors might want to look at Zales very seriously as it appears to be far cheaper than the rest. Before deciding on marriage, look at engaging with these companies.
tlwofford has no position in any stocks mentioned. The Motley Fool owns shares of Tiffany & Co.. Try any of our Foolish newsletter services free for 30 days. 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 Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!