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The global luxury goods market has been booming in recent years. A number of new brands, coupled with well-established household names have propelled the market to never-before-seen heights. The personal luxury goods market surpassed EUR 350 billion in 2022 and one major player has been particularly crucial in this bullish drive on the market - LVMH.
LVMH, or LVMH Moët Hennessy Louis Vuitton SE, is a French luxury goods company that unites the likes of Loro Piana, Givenchy, Louis Vuitton, Christian Dior, Loewe and countless other world-renowned brands under its corporate umbrella.
The sheer size and influence of LVMH have drastically increased the interest of investors in its stock, which has also managed to create boatloads of value for its long-term shareholders.
Founder Bernard Arnault’s net worth has also skyrocketed to over $225 billion in 2023.
"In 30 years from now LVMH will still be at head of the luxury sector and very much is today just at the beginning in spite of its size" - Bernard Arnault
Investors have been piling in to acquire a stake in the company and it is important to understand why and how LVMH has managed to become such an in-demand stock and what investors should know before adding LVMH shares to their portfolios.
LVMH has been one of the top performers in the European market for the past 5 years. The stock has returned over 220% over the same period. One of the main revenue drivers for the company has been the boost to the global luxury goods market after the Covid-19 pandemic.
Once countries started lifting lockdown measures and the global economy started to reopen, consumers around the world rushed to purchase the new releases from a broad range of LVMH brands.
LVMH is also a robust dividend stock - with a dividend yield of 1.42% and a quarterly dividend of EUR 3.00 per share.
A key factor in LVMH’s incredible stock growth is stability. The consumer demand for high-end goods has been steadily growing over the past decade and with a wide variety of brands under its name, LVMH has met the rising demand in a prime position.
Here’s how the stock has performed over the past five years:
Before investors put their capital at risk, it is important to understand the possible opportunities and challenges that lie ahead for LVMH stock. Understanding the advantages and disadvantages of investing in LVMH can help investors be better prepared for future market movements.
LVMH is the largest luxury goods company that is listed on a stock exchange. The company has a total market capitalization of over EUR 425 billion.
LVMH is publicly traded on Euronext Paris and is a constituent of the CAC 40 and Euronext 100 indexes.
LVMH is a stock that frequently trades at a high valuation, which limits the stock’s upside. However, the company pays EUR 3.00 per share as dividends, which may be attractive for long-term, passive investors.