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Getting 10%+ Yield From These 3 Retailers

Published Mon, 15 Jul 2019 13:03:30 -0400 on Seeking Alpha

Macy's (M), Kohl's (KSS), and American Eagle (AEO) are in my opinion some of the better stock opportunities in traditional retail. The icing on the cake, however, is that we can write calls to generate significant premium while only moderately limiting upside potential.
Here's a summary of these three trades, with more details on each below.
Stock (Price) Before Selling Call After Macy's (21.91)
Annual Div. Yield: 6.8%
Price Upside: Unlimited
Yield (Dividend + Premium): 13%
Price Upside: 18%
Kohl's (48.71) Annual Div. Yield: 5.5%
Price Upside: Unlimited
Yield (Dividend + Premium): 11.7%
Price Upside: 18%
AE (16.8) Annual Div. Yield: 3.3%
Price Upside: Unlimited
Yield (Dividend + Premium): 12.5%
Price Upside: 19%

Macy's

Source: Macysinc.com
Macy's has experienced a drop in revenue, EBITDA, and share price over the past 5 years as competition in the retail space has been intensifying. However, management has been making many strides towards returning Macy's to growth. They have improved utilization of square footage inside their store, adding an off-price section called Macy's Backstage to take advantage of the growth in off-price retail in the past several years. They are also testing an experiential retail section called STORY, which changes every few months to help bring traffic into stores.
In addition, Macy's has partnered with Brookfield Asset Management to redevelop some of the property it... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
MACY'S 17.00   5.2 3.29 1.51 8.83
L BRANDS 19.01   9.2 2.06 1.20 6.47
L. BRANDS 19.01   9.2 2.06 1.20 6.47
KOHL'S 52.36   11.5 4.54 2.68 5.24
AMERICAN EAGLE OUTFITTERS 17.60   11.6 1.52 0.55 3.18

MACY'S - M
MACY'S - M  


Older articles featuring Macy's (M):
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Dividend Massacre In This Crisis Is Already Breaking Records, But It Just Started
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80 S&P 500 High Yield Index, Gains And Upsides For March
Can We Beat The Market With Less Risk Using Dividend Stocks?
A Quantitative Risk And Dividend Model
Kohl's: Flat Top Line And Declining Margins Mean Risk To The Dividend
December S&P 500 Dividend Dogs: 64 For The Money
Macerich: This High-Yield REIT Will Return To Growth, If Not In 2020

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