53.13 0.00 (0.00%)
After hours: 6:56PM EDT
|Bid||52.15 x 1400|
|Ask||53.25 x 1400|
|Day's Range||52.03 - 53.22|
|52 Week Range||43.33 - 83.28|
|Beta (3Y Monthly)||1.12|
|PE Ratio (TTM)||11.73|
|Forward Dividend & Yield||2.68 (5.09%)|
|1y Target Est||N/A|
Nordstrom (NYSE:JWN) stock has suddenly moved into rebound mode. After hitting a multi-year low of around $25 per share, the stock has surged over the last few weeks, taking Nordstrom stock to almost $35 per share.Source: Jonathan Weiss / Shutterstock.com JWN remains far away from delivering impressive profit growth, and its low multiple may not persuade investors to buy after the recent run-up. Still, it has become a lucrative choice for an unexpected group -- dividend investors. Nordstrom's Amazing TurnaroundNordstrom stock has seen an impressive run since it announced an earnings beat on Aug. 21. The report began a rally that has taken JWN stock higher by about 40% in less than a month. Positive developments on trade talks with China have further fueled the rally.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Big IPO Stocks From 2019 to Watch Yes, amid the Amazon (NASDAQ:AMZN) threat, JWN and peers such as JCPenney (NYSE:JCP), Kohl's (NYSE:KSS) and Macy's (NYSE:M) have faced challenges over the last few years. As late as 2015, Nordstrom stock traded at over $83 per share. However, fears of Amazon and factors such as the trade war have helped send JWN to recent lows of around $25 per share.While the competition spelled bankruptcy for Sears (OTCMKTS:SHLDQ) and could for JCPenney, Nordstrom has found a way to remain relevant in a retail environment increasingly moving online. As a result, we now see a turnaround in Nordstrom stock.Even with the huge run-up, the forward price-to-earnings ratio stands at about 10.4. That does not seem expensive. Also, it has maintained an average P/E ratio of around 18.7 over the previous five years and such multiples usually signal a strong long-term buy. Dividends Have Become the Draw for JWNStill, looking at profits, one has to wonder if Nordstrom stock will face more permanent multiple compression. Analysts predict profits will shrink by 8.6% this year. For next year, Wall Street forecasts an increase of only 3.3%. It also predicts long-term earnings increases of 3.68% per year over the next five years. Given the slow pace of profit growth, the low P/E ratio alone would not persuade me to buy Nordstrom stock.However, I see a reason for dividend investors to buy stock in JWN. The silver lining in the long-time decline in JWN stock is the rising dividend yield. As late as 2014, JWN investors earned 1.22% in dividends. At that time, investors received $1.32 per share. The annual payout now stands at $1.48 per share and has remained at that level since 2016.Still, despite a modest increase, the yield has now risen to just over 4.3%. And it remains there despite the massive increase in the stock over the last month.To be sure, this payout presents somewhat of a burden. With a dividend payout ratio of 49.33%, the payout claims nearly half of the company's profits. Still, with growth returning, the company has no reason to put the stock at risk by cutting the dividend. Moreover, even with only 3%-plus profit growth, the payout ratio will fall over time. Final Thoughts on Nordstrom StockNordstrom stock should continue to rise over time, but not for a reason many would expect. Yes, the forward P/E of 10.4 looks cheap, both by S&P 500 and even by JWN standards. However, with profit growth expected to remain in the low-single-digits for years into the future, the P/E may not return to long-term averages of around 18.7.Still, the long-term decline in Nordstrom stock has led to an unexpected result -- a high dividend yield. JWN has become a well-suited vehicle for producing a cash return exceeding both the S&P 500 and most any bank deposit. Moreover, with a P/E ratio that remains low, they should receive the added benefit of a rising stock price.For retail investors wanting both growth and income, JWN stock may have just become the equity of choice.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post Buy Nordstrom Stock, But Not Because of Its Low Valuation appeared first on InvestorPlace.
According to Goldman Sachs, the time is now ripe for dividend investing. The firm’s chief US equity strategist, David Kostin, writes: “With the 10-year Treasury yield at just 1.5% and the Fed likely to cut two more times this year, investors should look for opportunities in dividend stocks.” Similarly, in a recent interview with CNBC, Mark Tepper, president and CEO of Strategic Wealth Partners, commented: “As an investor, it’s important to understand that the 30-year yield is pretty much in line with the dividend yield on the S&P 500 right now. So, which would you rather own over the next 10 years?... You’re getting the same yield with a growth component if you invest in stocks.”For investors looking to pick up some top dividend names, Goldman Sachs screened for stocks with both strong dividend growth and high dividend yields, based on dividend estimates and payout ratios. We used TipRanks to pinpoint three of the most promising stocks on Goldman Sachs’ dividend growth list. As you will see all three of the stocks covered below have a buy consensus from the Street, based on the last three months of ratings: 1\. AT&T (T)Telecom giant AT&T is one of the highest yielding dividend stocks singled out by Goldman Sachs. Currently investors receive a lucrative 5.63% yield, which translates to an annualized payout of $2.04 (paid quarterly). For comparison’s sake, the average tech stock manages a dividend yield of just 0.96%. And you can add to the picture extremely compelling dividend growth of 34 consecutive years. That makes T one of the elite Dividend Aristocrats, S&P 500 companies with over 25 years of straight dividend growth. Such a strong dividend outlook also provides foundation for the company’s share price, which has been on a roll recently. Year-to-date, T has now surged 27% to $36.25. That’s reflected in the fact that the stock’s average analyst price target now falls below the current share price. However, T maintains its Strong Buy analyst consensus. Plus five-star Cowen & Co analyst Colby Synesael has just reiterated his T buy rating with a price target of $40 (10% upside potential). According to the analyst, shares can continue to grind higher over the coming months. He points out that T is still executing against its 2019 guidance, while potential asset sales (i.e. from the Latin American and tower portfolios) could reduce risk and help pay down debt. Meanwhile Tigress Financial’s Ivan Feinseth has a Strong Buy rating on T, explaining: “We reiterate our Buy rating on AT&T as positive Business Performance trends continue to accelerate driven by the ramp-up of its high-speed 5G network, and the continued leverage of its WarnerMedia acquisition… We believe significant upside exists from current levels and continue to recommend purchase.” Overall, six out of eight analysts covering the stock rate AT&T a buy right now. 2\. Kohl’s Corp (KSS)With over 1,100 stores across the US, and annual sales of around $19 billion, KSS is one of the US’s largest retail chains. Although share prices have struggled recently, investors still enjoy an annualized payout of $2.68 (paid quarterly). That’s thanks to eight consecutive years of dividend growth pushing the yield to 5.52% vs the 2.07% services sector average. In the stock’s favor comes a recent tie up with a major rival- e-commerce giant Amazon (AMZN). On July 8 Kohl’s announced that it now accepts Amazon returns after a successful pilot program. KSS will pack, label and ship the returns for free, but hopes the initiative will “drive customers into our stores, and we are expecting millions to benefit from this service.”“It’s an interesting marriage because what Kohl’s needs is store traffic, and what Amazon needs is to make customers happier with a place to return their items,” Cowen & Co analyst Oliver Chen commented. “The dream is that it’s a fair but attractive split where that shopper will come in and purchase other items.” He recently reiterated his buy rating on the stock with a $58 price target (19% upside potential).Writing more recently, Guggenheim’s Robert Drbul reiterated his buy rating following Kohl’s Q2 results. Despite a choppy retail environment, the analyst notes that 1) management has the playbook to drive positive comps in 2H19; and 2) KSS remains best in class at expense management. Plus the analyst adds: “the company remains committed to returning cash to shareholders… and has improved its balance sheet over the past 12-18 months. We continue to view the management team and strategy in place at KSS favorably.” Given the ongoing highly competitive retail environment, Drbul does lower his KSS price target from $70 to $60. However, from current levels that still indicates upside potential of 24%. Overall, the stock reveals a cautiously optimistic Moderate Buy consensus. It has scored 6 recent buy ratings (including from Goldman Sachs’ Alexandra Walvis\- who has a $56 price target on the stock), alongside 4 hold ratings and 1 sell rating. 3\. Valero (VLO)Last but not least, Goldman Sachs draws our attention to Valero- the world's largest independent petroleum refiner and a leading ethanol producer. From a dividend perspective, VLO offers a high yield of 4.61% with eight years of dividend growth, easily beating the sector’s average yield of 2.54%. Moreover, the annualized payout currently stands at $3.60 (paid quarterly). Indeed, VLO has a very strong program to return capital to shareholders, with $11+ billion returned in 2015–18.And we can see that the stock boasts only buy ratings from the Street right now. In the last three months, six analysts have published buy ratings on the stock with an average price target of just under $100. For instance, Goldman Sachs’ Neil Mehta upgraded VLO from Hold to Buy three months ago. Citing the stock’s recent underperformance, the analyst also told investors “we expect the company to benefit from increased flows of crude to the US Gulf Coast where much of Valero’s refining capacity is located.” He has a $92 price target on the stock (18% upside potential).Another analyst singing the stock’s praise is RBC Capital’s Brad Heffern. After the company reported a very standard VLO beat for the second quarter, Heffern wrote “We like Valero Energy for its position at the bottom of the global refining cost curve and its significant leverage to the US Gulf Coast refining market.” However, the analyst did that the 2Q19 bar was relatively low and should have been more easily cleared. His buy rating comes with a $98 price target. Discover the Street’s best-rated stocks with the Top Analysts’ Stocks tool
Moody's rating action reflects a base expected loss of 71.9% of the current pooled balance, compared to 82.3% at Moody's last review. The second largest specially serviced loan is the 126-130 Main Street ($9.8 million -- 26.9% of the pool), which is secured by two mixed-use buildings in downtown New Canaan, Connecticut, located eight miles north of downtown Stamford.
Kohl’s Corp. president Sona Chawla will step down in mid-October, the retailer said Friday. Chawla joined Kohl’s (NYSE: KSS) in 2015 as its chief operating officer, according to the company’s website. Before joining the Menomonee Falls-based department store chain, Chawla spent seven years with Walgreens in senior leadership roles.
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be...
Larry Montgomery led Kohl's Department Stores Inc. on a surge of growth that is likely impossible for any retailer to repeat in today's economic environment — expanding the chain's brick-and-mortar footprint fivefold to nearly 1,000 stores in a decade.
(Bloomberg Opinion) -- Americans better make the most of their Labor Day discount shopping. It could be the last they see for a long time.A 15% tariff that went into effect Sept. 1 on about $112 billion of goods imported from China will start pushing up prices of clothing, shoes and other consumer goods arriving at U.S. ports this week.That should start taking a serious toll on shopping in the U.S. While 82% of intermediate inputs are already affected by tariffs, just 29% of consumer goods have had levies to date. That figure will now rise to 69%, and 99% when a final tranche is imposed on Dec. 15, according to the Peterson Institute for International Economics.The Trump administration – or at least its trade representative, Robert Lighthizer – has recognized the risk of bringing the trade war to consumers’ pockets. The current total-war scenario, with tariffs imposed on almost the entirety of imports from China, was first threatened more than a year ago, but Lighthizer has worked hard to excise the sorts of goods purchased by price-sensitive shoppers from his product lists.The latest escalation means that sort of strategic precision is no longer possible. Around the country, apparel retailers have already worked out where best to jack up prices, while toy shops and sporting-goods stores will be doing the same ahead of the post-Thanksgiving tranche.One unexpected ally for the Trump administration is the retail industry itself. This is a business that invented the term “sticker shock,” after all, so trying to hide the costs of Trump’s policies from consumers isn’t exactly unfamiliar terrain.“The teams are working on a targeted pricing strategy in certain categories,” Gap Inc. Chief Financial Officer Teri List-Stoll told an investor call last month.“We have lots of tools in place to monitor elasticity and what the competitive environment is,” Kohl’s Corp. Chief Executive Officer Michelle Gass told analysts Aug. 21. “So we'll make very sound and surgical decisions.”There’s already a model for how this is likely to play out. One of the first rounds of tariffs imposed by the Trump administration applied a 25% levy on washing machines, but an April study by economists at the Federal Reserve and University of Chicago found that retailers instead decided to spread the pain around.Prices for washing machines jumped about 12% more than those of comparable goods after the levies were imposed – which might have suggested that stores and suppliers were taking some of the pain rather than passing the full 25% cost onto consumers. There was a telling exception, though: The price of dryers rose by about the same magnitude, despite the fact that they weren’t affected by the tariffs. In other words, retailers were splitting the extra cost between two similar products in an attempt to minimize the apparent rise in prices.As a result, shoppers are unlikely to see markup racks with “Prices raised on account of trade war” tags on them. Instead, watch out for harder-to-pin-down increases in categories where individual chains have pricing power, as well as weakening of gross margins, cost-sharing with Chinese vendors, and efforts to shift parts of the supply chain to other source countries. Returns on equity for consumer and durable goods companies in the S&P 500 index are already at recessionary levels, despite the general buoyancy of stocks in 2019; you’d be bold to bet that was set to improve over the balance of the year.Consumer sentiment is tracking down from its recent rosy levels in any case. Expectations for the economy suffered their sharpest monthly fall since 2012 in the University of Michigan’s latest survey. Views of current conditions fell to their lowest level since President Donald Trump was elected, and Republicans posted their most pessimistic consumer sentiment since Trump’s inauguration.(1)The strong U.S. economy over the past two years gave President Trump latitude to prosecute his trade battle with China – but as it starts to weaken, that may test his resolve. Given the relief in financial markets in recent days at signs of a detente, he might want to consider the benefits of a more lasting peace.(1) There's a strong partisan split in consumer sentiment, with views jumping sharply depending on whether or not a consumer's favored party is in the White House.To contact the author of this story: David Fickling at firstname.lastname@example.orgTo contact the editor responsible for this story: Rachel Rosenthal at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Today we are going to look at Kohl's Corporation (NYSE:KSS) to see whether it might be an attractive investment...
In recent years, Rite Aid (NYSE:RAD) stock has done little more than fight to survive. The Camp Hill, Pennsylvania-based pharmacy chain has long struggled against its peers and has failed at multiple attempts to sell itself to a competitor. This resulted in shareholders approving a 1-20 reverse stock split in April to avoid delisting. However, this did little to stem the tide.Source: Shutterstock The company temporarily boosted optimism when it joined the Amazon (NASDAQ:AMZN) delivery network. However, excitement over the deal quickly faded. Plus, a change in the CEO position has failed to stem the drop in the RAD stock price. Without a deeper partnership with Amazon, I see little reason to buy Rite Aid stock. Amazon Deal Brought Only Temporary ReliefThe Amazon deal initially sparked hope as it would increase foot traffic into Rite Aid stores. There's some logic to this argument. As our own Will Ashworth argues, the Amazon return program at Kohl's (NYSE:KSS) led to a 9% rise in foot traffic and an 8% revenue increase in stores which supported the return program. But will that be enough?InvestorPlace - Stock Market News, Stock Advice & Trading TipsI think some also hope this will lead to an Amazon purchase of Rite Aid itself. Such optimism has brought disappointment before. An attempt by Walgreens Boots Alliance (NASDAQ:WBA) to take over the company led instead to the sale of 1,932 Rite Aid stores to the pharmacy chain. Albertsons also tried to buy Rite Aid. This proposed union also fell through after RAD shareholders balked. * 10 Marijuana Stocks That Could See 100% Gains, If Not More Moreover, the Amazon deal failed to cure the ills of Rite Aid stock. Within a month, RAD stock had fallen to levels it saw before the Amazon announcement. Also, the recent ascendancy of Heyward Donigan to the CEO position has not stemmed the decline. Rite Aid Can No Longer CompeteAs a result, the RAD stock price now stands at about $5.60 per share. Certainly, Amazon and online sales have changed the dynamics of the pharmacy business for Rite Aid and its peers. Standalone pharmacies have long dealt with competition from both grocers and major retailers.Now with the threat of online competitors, margins feel more pressure than ever. This probably explains some of the reasons why CVS (NYSE:CVS) entered the insurance business and built in-house clinics.Rite Aid cannot follow suit. Just as the company needs to make significant changes to survive, RAD finds itself with both falling revenue and profits. Unfortunately, as a $300 million company with $6.4 billion in long-term debt, it has no financial room for such a pivot.Put simply, RAD stock has become the Sears Holdings (OTCMKTS:SHLDQ) or the JCPenney (NYSE:JCP) of pharmacies. Rite Aid has evolved into the type of business that consumers do not need in today's world.The fact that its typical customer is over 55 and earns under $40,000 per year does not bode well for its future. Moreover, competition forces it to sell what it does offer at thin margins. Unless and until Amazon or another major online retailer can make Rite Aid relevant, I see a dim future for RAD stock. The Bottom Line on RAD StockOnly a deeper partnership with Amazon can save Rite Aid. The changing retail pharmacy landscape has fundamentally changed Rite Aid's business. Unlike Walgreens and CVS, it lacks the necessary resources to improve its business and remain relevant. Debts remain too high, and numerous suitors have passed on what remains of Rite Aid.If results at Kohl's serve as an indication, Rite Aid stores will see more foot traffic and revenue. However, this does not change the fact that consumers can find anything Rite Aid offers elsewhere and probably at a lower price.If Amazon took over the stores entirely, perhaps the company could still play a significant role in today's pharmacy business. Barring that scenario, the time has come to think of Rite Aid stock as the next Sears.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Rite Aid Stock Continues to Fade into Irrelevance Despite Amazon appeared first on InvestorPlace.
Sluggish sales has been the theme for retailers reporting second-quarter results, but we think the market isn't giving enough credit for future improvement. Nordstrom, Macy's, and Kohl's all trade well below what we think they're worth. Nordstrom JWN joined other North American department stores in reporting weak sales for the second quarter.
These department store stocks may have been beaten down enough to once again provide value to your portfolio with significant dividend yields hedging some of the risks of buying into a potentially dying sector.
(Bloomberg Opinion) -- Who knew the unsexy work of disciplined inventory and expense management could get Wall Street this excited?Or, at least that’s what I think is driving a Thursday morning surge in shares of Nordstrom Inc., which reported second-quarter earnings late Wednesday. The retailer beat analysts’ earnings per share estimates, an outcome it chalked up to deft expense control. But, to my mind, practically everything else about this report is worrisome for Nordstrom, and indicates that something has seriously gone off track recently for this company.Nordstrom said net sales fell 5.1% from a year earlier in the quarter. The company no longer reports comparable sales, a measure that typically captures sales at stores open more than a year and online sales, and is considered a key benchmark of retailer health. It said when it announced that decision that net sales in fiscal 2019 would effectively approximate comparable sales. So, if we assume that to be true, Nordstrom effectively just had its worst results in at least decade on this metric. The first quarter was the second-worst.It’s not like one of its major lines of business provided reason to dismiss troubles at the other. Net sales plunged 6.5% in the full-price division, an especially bad result when you consider Nordstrom held a major promotional event in the quarter, its Anniversary Sale, which is traditionally an important driver of annual revenue. TJX Cos. managed to deliver positive comparable sales in the second quarter in its division that includes off-price wunderkinds Marshalls and T.J. Maxx, and yet Nordstrom Rack, a direct competitor, saw net sales fall 1.9% from a year earlier.Adding to the gloom, Nordstrom’s e-commerce sales rose just 4% in the second quarter. I realize that the company has a relatively mature online business for a legacy brick-and-mortar retailer, drawing 30% of its overall sales from e-commerce. However, this is a significant downshift from the rate of growth the company had been recording in this channel. The bleak news doesn’t stop there: Nordstrom reduced the top end of its annual earnings guidance. Also, its previous outlook for net sales was a range of flat to a 2% decline; it is now just for an approximately 2% decrease. Achieving even this dimmer outlook will require a pretty speedy change in momentum from the first half of the year, and I’m not sure executives have adequately explained how they can turn on a dime and pull that off. All of this is what leaves me perplexed as to why this report would do anything but make investors squeamish about Nordstrom’s prospects. I’ve long thought of Nordstrom as something of a unique retailing species. While it is technically a department-store operator, I’ve resisted thinking of it as such, because it has largely avoided all the typical problems we associate with that troubled format. But earnings results like these are making me reconsider whether it is really different enough to withstand the relentless pressure facing the category.These numbers make it harder to ignore stumbles by this company that might once easily have been overlooked. In the first quarter, Nordstrom erred with a change to its loyalty program that it believes kept shoppers away from its stores. In the second quarter, sales at its Anniversary Sale were soft, which co-President Erik Nordstrom told investors was in part because “We simply ran-out of our top items.” These missteps don’t exactly show the company to be in top form. I don’t think Nordstrom’s situation is hopeless. With less than 140 full-price stores, I’ve noted many times that Nordstrom is fortunate to not have a bloated store portfolio – unlike Macy’s Inc., J.C. Penney Co. and Kohl’s Corp. Its locations don’t tend to be in the dumpy malls that are turning into shopping ghost towns, and I see promise in its tiny-format Nordstrom Local concept. But its results so far this year suggest these factors might not be sufficient protection from the curse that is being a department store in 2019.To contact the author of this story: Sarah Halzack at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Nordstrom earnings beat but guidance was cut after Kohl's earnings beat views and reaffirmed full-year guidance, in sharp contrast to Macy's last week.
Conversions from the nationwide rollout of the Amazon returns program, for example, have been consistent with pilot stores.