This closeout retailer beat earnings estimates by $0.10 last quarter. The shares have a current annual dividend yield of 2.16%, paid quarterly.
Big Lots, Inc. (BIG)
From The Prudent Speculator
Big Lots is a closeout retailer with stores across the United States. The company sells furniture, food, home goods, toys and electronics aimed at providing great value to customers by offering a broad assortment of products that are results of production overruns, cancellations, liquidations, or other supply chain disruptions.
We think BIG fits several of the themes mentioned in our Where to Invest in 2021 Special Report: Boasts a generous (and we think likely to grow) dividend yield. Sports a small market capitalization of $1.6 billion and benefits from the shift towards a work-from-/stay-at-home economy. On that last score, last month management said, “We experienced a favorable impact to net sales during the third quarter of 2020 driven by demand for our home products, which includes our Furniture, Seasonal, Soft Home, and Hard Home merchandise categories, due to customers spending more time at their homes as a result of the ongoing COVID-19 coronavirus pandemic.”
The stock has soared mightily off of the March lows, but a 20%+ pullback from the August peak had us intrigued. True, analysts expect revenue of $5.8 billion and EPS in the $6.00 range for each of the next two years, but a forward P/E ratio below 8 and a whopping $400 million remaining on a recently announced repurchase program make us buyers today.
John Buckingham, The Prudent Speculator, theprudentspeculator.com, 877-817-4394, January 5, 2021