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Whirlpool's Dividend Delights

·3 min read

Whirlpool Corp. (NYSE:WHR), one of the world's most well-known appliance makers, is a dicey investment prospect at the moment, in my opinion. Sales are sluggish, the stock is volatile, and while debt has gone down, so has the company's cash balance. Whirlpools Beta is a high 1.45. Nevertheless, the company is working to expand and secure additional market share, which could help it grow in the long run. It also offers an attractive dividend yield.

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  • High Yield Dividend Stocks in Gurus' Portfolio

  • NYSE:VTEX) in May 2021. Vtex is known as the worlds fastest-growing commerce platform. It brings Whirlpool native marketing and order management capabilities.

    The company is heavily investing in its "6th SENSE" technology program, which lets its appliances intuitively learn from the owners uses and needs. For instance, freezers and ovens detect temperature variations, minimizing fluctuations and restoring them to optimal settings.

    Whirlpool has acquired 10 companies and divested four over the past decade. In August, Whirlpool bought InSinkErator for $3 billion.

    Valuation and sentiment

    The GF Value chart rates Whilrpool stock as Significantly Undervalued. The GF Value is $210.76.

    Whirlpool's Dividend Delights
    Whirlpool's Dividend Delights

    Whirlpools dividend is attractive, too. The forward dividend yield is 4.56% at the present time. That is a higher yield than 75% of the companies in the industry pay. It will cushion bulls' ability to hold shares for the long term.

    The companys overall GF Score is 91 out of 100. It ranks high for profitability, growth and value. Its financial strength and momentum rankings are softer but in healthy territory.

    Whirlpool's Dividend Delights
    Whirlpool's Dividend Delights

    The price-earnings ratio of 13.11 puts the company in the top half of over 300 companies in its industry in terms of being undervalued. The price-sales ratio is 0.41, below 76.79% of peers, and its price-book ratio of 1.98 is in the bottom 61% of the industry. Whirlpool reduced its total debt from almost $7.86 billion in June 2021 to $5.85 billion in June 2022.

    Hedge funds move in and out of the stock regularly. As a group, they increased their holdings in the stock by almost 155,000 shares last quarter following two consecutive quarters of reducing holdings. However, 33 funds owned shares in the first quarter of 22, while only 24 owned shares at the end of the second quarter.

    Looking ahead

    Whirlpool is a legacy American company producing appliances that are in demand mostly because of brand name and quality recognition. Rising mortgage rates and rents are slowing new housing construction and lowering the moving rate of tenants, and those moving house are the primary consumers of new household appliances. Replacement rates for appliances are unlikely to change. Inventories of parts are smaller due to supply chain shortages. Parts and labor costs are rising, so oftentimes, it is cheaper to buy a new appliance.

    The U. S. market is expected to grow at a compound annual growth rate of 4.4% (through brick and mortar locations) to 8.1% with smart home appliances leading the way. This bodes well for Whirlpool, though there is stiff competition from other brand name manufacturers and cheaper off-brands. The most significant headwind for Whirlpool naturally comes from the economy; if there is a recession, business could suffer.

    This article first appeared on GuruFocus.