Our first pick is a home goods retailer whose online sales during this pandemic, have increased 46%. The company’s current annual dividend yield is 2.19%, paid quarterly. Our second recommendation is a sale of an aerospace/defense company whose shares are not moving.
Buy: Williams-Sonoma, Inc. (WSM)
From Dow Theory Forecasts
Home-goods retailer Williams-Sonoma appears well-positioned to weather the coronavirus-driven recession, especially as Americans spend more time in their homes. In the April quarter, the retailer’s online business partially overcome widespread store closures, as per-share profits slipped 9% on flat sales. For the July quarter, rising analyst estimates target flat per-share profits on 3% sales growth.
The shares trade at 20 times estimated current-year earnings, a 7% discount to the median S&P 1500 Index specialty retailer. The stock is being initiated as a Buy and a Long-Term Buy.
Richard Moroney, CFA, Dow Theory Forecasts, dowtheory.com, 800-233-5922, August 10, 2020