NUS - Nu Skin Enterprises, Inc - ROE of 20% crushes the industry average of 4%

Nu Skin Enterprises, Inc. (NUS), which trading near a 52-week high, is scheduled to release first-quarter results on May 1, 2008. The company reported solid fourth-quarter results, noting that it expects to earn 23 to 25 cents per share on revenue of $281 million to $286 million for the first quarter. On Feb 19, the company raised its quarterly dividend by a half cent to 11 cents per share. NUS offers a dividend yield of 2.4%, providing solid income while it operates within an industry that on average rarely pays a dividend. Nu Skin’s ROE of 20% crushes the industry average of 4%.

Full Analysis

Nu Skin Enterprises, Inc. develops and distributes personal care products and nutritional supplements worldwide. It offers its products primarily under the Nu Skin, Pharmanex, and Big Planet brands. The company sells its products primarily through independent distributors in north Asia, the Americas, south Asia Pacific, and Europe. Nu Skin Enterprises was founded in 1984 and is headquartered in Provo, Utah.

Income

On Feb 19, the company announced that it was increasing its quarterly dividend by a half cent to 11 cents. The dividend was paid out on March 19, 2008. NUS offers a dividend yield of 2.4%, providing solid income while it operates within an industry that on average rarely pays a dividend.

Growth

Technically, the personal care and nutritional supplements company has been watching its shares trade near a 52-week high.

Nu Skin also sports fundamental growth. The company reported solid fourth-quarter results that were in line with analyst expectations in early February, noting that it expects to earn 23 to 25 cents per share on revenue of $281 million to $286 million for the first quarter.

The release of first-quarter results is scheduled for May 1, 2008.

Nu Skin announced in January that it received the go-ahead to begin direct selling activities into all districts of Beijing and Shanghai in China, which the company eventually believes could be its largest market.

President and CEO Truman Hunt said, "during the quarter, we also successfully executed phase two of our restructuring plan, including significant simplification of our operating infrastructure in China. These efforts are targeted to help us achieve our operating margin objective of 10.5 percent for 2008."

"The top-line improvements we are seeing globally, coupled with the aggressive steps we are taking to achieve our operating margin target, give us confidence that 2008 will be a great year," said Hunt. "We expect to improve earnings per share by 35 to 45 percent through increased revenue and improved operating efficiency. Overall, I am very encouraged with the direction of the business," concluded Hunt.

Nu Skin also boasts some nice comparisons against industry competition, with its ROE coming in at 20% against the industry average of just 4%. The company's profit margin stands at 3.8%, compared to the industry average of 1.2%.

Content Courtesy: Zacks Investment Research

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