Wait, I was actually conservative in what I stated. Sales for FY 2010 were 5.8 Billion and guidance is for 20-25% sales growth for FY 2011 (current year), so that would put 7 Billion in sales on the low end of the estimate for this year.
NOOK has better in-store expsure to dedicated readers being sold in BN stores and in Best Buy.
NOOK has better entry price point than kindle at 149$ for the wi-fi, and both wi-fi and 3G versions have touch screen navigation as apposed to a key-pad.
All the sales garnered from customers who bough a NOOK are likely to take customers from Amazon.com because you are required to set up an account on BN.com for your NOOK downloads (where they now retail new and used on par with amazon, who doesn't have a virtual monopoly on online book sales now)
B&N is in substantially better financial condition than it's comparable brick-and-mortar rivals (i.e. Borders), so it's possible one of their major competitors could fold.
Dividend is not set in stone, but I don't feel it's in jeopardy becuase the short term push for e-books will not be a constant expense going foreward and B&N has lots of liquidity.
Any way you look at it, there isn't a risk for Barnes and Noble as a going concern from a financial standpoint, and they are the #1 book retailer with nothing to fear from brick-and-mortar competition and nowhere to go but up with regard to online sales.
I hate to say it, but if you only concentrate on statistical approaches to stocks you will float along with the rest of the guys running spreadsheet screens.
Hell of a contrarian play on a well loved set of stores with no prospect of a total loss. You can't be scared :D