Macy’s Inc. is the last of our cheap dividend stocks to buy now, and it looks beaten-up enough to deserve a look.
Yes, Macy’s has been beaten down since mid-2015. But that has driven the yield up to nearly 5%, and its forward P/E is in the very low double digits now.
Rumors circulated that Hudson’s Bay Co. (HBAYF) would buy the company, though talks appear to be at an impasse.
Speculation aside, though, the stock is on the mend. The physical retailing market does present some risk for investors, but competition has been around for decades. Online stores like Amazon.com, Inc. (AMZN) offer free shipping and low prices for Prime customers. Wal-Mart Stores, Inc. (WMT) is constantly a threat and is building its online presence. Those headwinds aren’t going away, but they’ve mostly been factored in at this point.
Macy’s has a massive real estate portfolio, room to cut poor-performing mall locations and is improving its supply chain. This should improve productivity and lift EPS, and that should keep the dividend — which is extremely appealing for the retail sector — safe over the long-term.
This article is by Chris Lau of InvestorPlace. As of this writing, he held none of the aforementioned securities.
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