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Stage Stores: The 24% Yield Trap

Published Thu, 09 Feb 2017 14:42:30 -0500 on Seeking Alpha

A 24.49% dividend yield for a company trading near its all-time low sounds like a good idea for long-term and contrarian investors searching for bargains. Yet in this article, I will discourage investors from buying into such a company. In the past 10 years, Stage Stores (NYSE: SSI) has seen its market valuation from $1 billion to the current $66 million. The stock price is currently trading at $2.45, which is near its all-time low. As I will describe in this article, investing in SSI presents more risks than rewards for investors. Below is a 10-year chart comparing SSI performance with S&P 500 Retail Select Industry (SPXSRE) and the Dow Jones Apparel Retailers (DJUSRA).

About Stage Stores
Stage Stores is a specialty department store with more than 800 stores and more than 13K employees. The company sells apparel and accessories under five brands: Bealls, Goody's, Palais Royal, Peebles, and Stage in 36 states. It also operates a direct to consumer model through its e-commerce and Send platforms. Most of the company's stores are located in small towns with less than 150,000 people.
The company's quarterly revenues have fallen from $351 million in October 2015 to $317 million in October 2016. During the same time, the net income has fallen from -$10.18 million to -$15.63 million with EBITDA falling from $2.49 million to -$10.2 million. At the same time, the company's cash and short-term investments have fallen from $23 million to $18.9 million, with... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
STAGE STORES 0.83   0.0 -3.89 0.05 6.15


Older articles featuring Stage Stores (SSI):
Stage Stores Reports First Quarter Results and Declares Quarterly Cash Dividend
Stage Stores Board Declares Quarterly Cash Dividend
Stage Stores Reports Third Quarter Results, Declares Quarterly Cash Dividend, and Narrows Guidance Range
Stage Stores Reports First Quarter Results and Declares Quarterly Cash Dividend
10 Challenger Dividend Dogs Set To Gain 22.7%-50.3% By May 2018
Dividend Streaks In Danger: 2016 Review And 2017 Preview
5 High-Yield Companies To Avoid
These Challenger Dogs Lend Zip And Dash To Your April Dividend Portfolio
Stage Stores Board Declares Quarterly Cash Dividend
Stocks Trading Ex-Dividend on 11/25/2016