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Nu Skin Enterprises Inc (NYSE:NUS) develops, distributes and sells personal care and nutritional supplements under the Nu Skin and Pharmanex brands. The company has earned a 20% return on equity while growing profits and dividends at an 8-9% pace over the last five years, though it is expected to increase to a 14-16% rate over the next five years. Driving profits are:

  1. The introduction of new products tied to its ageLOC technology, which claims to slow the skin’s aging process,
  2. Geographic expansion in both Europe and Asia,
  3. An aggressive cost control program [margins rose from 12.5% to 13.5%]

The primary negative for NUS is that its large international operation exposes it to currency risk.

NUS is rated B++ by Value Line, carries a 21% debt-to-equity ratio and its stock yields 1.5%. (NUS was purchased by the High Yield Portfolio when its stock yielded 4.7%)

Statistical Summary

Stock Yield

Dividend Growth Rate

Payout Ratio

# Increases Since 2001

NUS

1.5%

14%

22%

10

IND*

2.1

10

27

NA

Debt/Equity

ROE

EPS Down Since 2001

Net Margin

Value Line Rating

NUS

21%

23%

3

16

B++

IND

67

22

NA

NA

*IND is the average of the Toiletries/Cosmetics industry complied from Value LIne

Chart Note: NUS stock made great progress off its March 2009 low, quickly surpassing the down trend off its July 2004 (not a misprint) high (red line) and the November 2008 trading high (green line). The stock is in a long-term up trend (straight blue lines) as well as an intermediate-term up trend (purple lines). The wiggly blue lines are Bollinger Bands. The High Yield Portfolio owns a 50% position in NUS. Additional shares would be Bought at $11; the lower boundary of its Sell Half Range is $46. That makes the stock a sale on a value basis. However, our discipline is to only Sell Half of our position as long as the fundamentals remain in tact. We now have our original cost out of the stock. If the stock continues to run, it will be free money. If it retreats, then our Portfolio will Buy the shares back.

(Click chart to expand)

Source: Yahoo Finance

Disclosure: I am long NUS.

Source: Is It Too Late To Buy Nu Skin Enterprises?