Sunday, September 8, 2024

Retail Renaissance Or Decline? Kohl’s Intrigues With Hot 7.7% Yield

Must read

Department store retailer Kohl’s (KSS) is an interesting stock for investors looking to bet on growth while cashing in on a hot 7.7% dividend yield.




X



Operating more than 1,100 stores across 49 states, Kohl’s sells a vast array of products ranging from home decor to beauty. But most of its sales are driven through footwear and apparel buys.

With a 7.7% annualized dividend yield, Kohl’s makes IBD’s Dividend Leaders screen. Although the company sliced its dividend during the pandemic, it has since been raising it. Kohl’s next quarterly dividend of 50 cents per share has an ex-dividend date of June 12.

Kohl’s had an intriguing fiscal year that saw a modest drop in revenue but a spike in profits as the company managed costs well. Looking ahead, the company is expecting continued growth in earnings while also seeing revenue turn higher.

The department store chain is betting heavily that increasing investments in areas such as home decor will pay off. Those bets will likely turn out well if interest rates soften and consumer spending remains robust. That’s a big “if.”

Dividend Stock’s Earnings Report May 30

Investors will get a clearer picture of Kohl’s progress when the company reports first-quarter earnings on May 30. Analysts’ consensus earnings estimate is 5 cents a share on revenue of $3.41 billion.

Given the significant uncertainties surrounding the company, earnings are expected to be volatile. Investors would be smart to wait for the report before making any trades.

The volatility around Kohl’s stock is certainly not for the faint of heart. This risk is underscored by the company’s debt, which is rated outside investment grade at BB+ by S&P Global.

While Kohl’s projects growth, there are concerns about a turnaround in multiple segments. Last year, only the accessory segment, led by Sephora, showed revenue growth.

The dividend stock is forming a cup-with-handle pattern with a buy point of 28.25, per MarketSurge pattern recognition.

YOU MAY ALSO LIKE:

AI Investing And 4 More Predictions For The Next Decade

IBD Live: Learn And Analyze Growth Stocks With The Pros

Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest

Latest article