Is best buy stock cheap? This article looks at some of the reasons why Best Buy stock is cheap, especially when compared to Target and other large-cap retailers. Best Buy stock is currently trading for about 17 times its earnings, which is cheap, and it offers a huge dividend yield. If you want to make some serious money, buy Best Buy stock. Read on to learn why it’s cheap and a good investment. It’s a company you can use for years to come.
Target is trading for well over its intrinsic value
If you’re a target stock investor, you’re probably wondering if Target is trading for its intrinsic value. Target Corporation recently released its first quarter 2022 financial results. While sales increased 4.0% YoY, costs rose. Inflation pushed up the cost of inventory, storage, and transportation. These costs cut into profit margins. The bottom line has come in below Wall Street expectations for 13 straight quarters. Target’s stock price has declined nearly 40% in that span.
In today’s changing retail environment, Target has remained a reliable provider of several consumer commodities. With more than 1,897 stores nationwide, Target is a valuable retailer that has virtually everything a consumer needs. However, in a country where supply chains are under strain, Target is an especially critical business. Target’s omnichannel approach, curbside pickup, and a growing e-commerce presence are helping the company thrive.
Best Buy is trading for about 17 times earnings
If you’re wondering why Best Buy is trading for about seventeen times its earnings, it’s time to look at the company’s long-term outlook. The company’s EPS has doubled in the past five years, and the company is still growing. This is due in part to its focus on same-store sales and opening more stores. It is also increasing its online presence as a means of delivering electronic products to consumers. Best Buy’s EPS has grown faster than its sales over the past five years, and the consensus analysts from Seeking Alpha believe that Best Buy will continue to grow at about 8.5% annually over the next decade.
In addition to the traditional consumer electronics business, Best Buy is also focusing on the health and wellness sector, where it has made some impressive acquisitions in recent years. It recently bought a U.K. tech firm to help with telehealth and remote monitoring. The company also sells devices that track medical conditions, including diabetes and high blood pressure, and provides call center-supported services to senior citizens. Best Buy’s president of its health division, Deborah Di Sanzo, sees demand for these services increasing in coming years as more Americans make their homes smarter and use virtual experiences instead of traditional visits to doctors.
It has a massive dividend yield
While the stock price has seen material weakness in recent months, Best Buy has a massive dividend yield. The company has grown its sales by a tremendous amount, entered the healthcare space, and is paying a consistent dividend. While its share price is currently trading below its historical average, it is a good value buy. Dividend payout ratios of Best Buy are at about 30%, making it a safe investment. Best Buy management expects comparable store sales to decline by between three and six percent in the next year, but that revenue and operating income will increase by a massive amount by 2025.
Investors can take advantage of this massive dividend yield by buying Best Buy stock. The company’s EPS growth in the past five years has been significant, more than doubling. This growth is a sign that Best Buy is retaining a lot of its cash to support the dividend. Best Buy is also comfortable paying a high dividend yield given its current cash flow and earnings. However, the company does face some challenges in increasing its prices in a competitive environment.
It is cheap
It is hard to argue that Best Buy is cheap at the moment. The company has seen its share price decline by a material amount over the last two years, a significant downturn by market standards. However, the company has also been able to increase sales by a sizable amount, entered the healthcare industry, and pays a growing dividend. This all makes Best Buy stock look very cheap. Furthermore, many well-known money managers have viewed the current market conditions as a buying opportunity.
A recent downturn in Best Buy’s stock price may have contributed to the company’s decision to trim the square footage of its stores and reorganize their operations in order to increase foot traffic. The company also announced a price guarantee, thereby preventing consumers from shopping elsewhere. The strategy has clearly paid off, with the company now enjoying a low payout ratio and a stable management team that is aligned with its shareholders’ best interests.
