This morning, LVMH, the owner of famous brands like Louis Vuitton, Sephora, Dom Perignon, and TAG Heuer, confirmed a bid to acquire yet another world-renown luxury brand: Tiffany & Co. (TIF). With the news of this bid, TIF’s stock is up over 30% for the largest one-day gain in the stock’s history. TIF has been no stranger to big price moves lately. Previously, its best single-day performance was on May 23rd of last year in response to an earnings triple play when the stock rallied 23.3%. Today’s rally brings the stock to levels not seen that massive rally last year and within 5% away from its all-time high that was put in place in July of 2018.
Given the surge in TIF, the dividend yield has been brought down quite a bit. On Friday, the stock yielded 2.35% which was above the yields of the S&P 500, Consumer Discretionary sector, and Retailing industry group. With the stock now yielding 1.83%, it’s payout is now less than all of these and even 2 basis points less than the yield of the ten-year US Treasury. With that said, the company has boosted its yield for 15 straight years, and the payout ratio of 51.5% is not a concern. Start a two-week free trial to Bespoke Institutional to access our Earnings Explorer, Security Analysis tool, and more.