Credit: Shutterstock photoAlthough Radioshack ( RSH ) is apparently close to death, not all of the names in the electronic retailer space have given up just yet. Take for example Best Buy ( BBY ) , a company that is still down significantly for 2014, but is attempting to execute a difficult turnaround plan.
Stock of BBY is down close to 30% this year, though it actually up over the trailing 52 week period, so it is having at least some success staying afloat, though volatility levels have been extreme. Regardless of the turnaround plan, the company does appear ready to give back more to shareholders as evidenced by its recent dividend announcement.
Best Buy Dividend
Best Buy announced that it was raising its quarterly dividend payment from 17 cents a share to 19 cents a share. This represents a 12% boost to the rate, and it is likely to push BBY over a 2.5% yield, making it a relatively attractive dividend payer, especially when compared to the S&P 500 average which is close to 2.0%.
Zacks Rank
At time of writing, BBY has a Zacks Rank #3 (Hold), an upgrade in the past week from sell territory. Additionally, the retail-consumer electronics industry is ranked in just the top 42% so it is looking relatively neutral from an industry perspective as well.
Still there is some promise if investors look to recent earnings estimate revisions. Many of the most recent estimates for the current year and next year have been moving higher, though the magnitude of these revisions has been pretty small. Meanwhile, the current quarter and next quarter estimates have been moving lower so it is pretty mixed overall.
Bottom Line
BBY is currently in a very interesting position as its shares have floundered as of late but there is still hope for the long haul. The estimates are telling a similar story, as current estimates are pretty weak while current year and next year ones are relatively favorable.
Still, the recent news of a dividend hike should be welcomed by investors, as it does suggest at least some financial strength for BBY going forward. The increase also makes BBY an interesting target for income investors, though the volatility of the shares are likely to dull the appeal of these shares for low risk investors seeking decent sized yields.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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