WSM is a strong dividend growth stock with high dividend growth, but its low dividend yield indicates the stock may be overvalued relative to its dividend growth.
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If we go to Wednesday before market open, SJM, that's the Smuckers company. They report before market open. So does Kohl's, that's KSS, and WSM, which is William Sonoma. These are all dividend growth companies.
I take that back. I have not looked at Kohl's recently. They are down 70% over the past 5 years, and they cut the dividend by 50%. Actually, they had a 75% dividend cut from the peak.
So, Kohl's was historically a dividend growth stock. They suspended it during the pandemic. A lot of retail companies did that and different types of businesses. They brought it back.
They raised it once and then they had to cut it. Not a Kohl's guy. Haven't been following this company, but it's down a lot. So, maybe you could look at as a value play if you do your research and it looks promising.
If we go back to SJM, that's a company I've historically owned in the past. However, I since got rid of it as I focused more on total return and growth and dividend growth. I like a lot of the consumer packaged goods companies.
I like I'm a big fan of when you go to the grocery store aisle. I know all the brands of like what company owns what. I find it all very interesting. But there's not a lot of growth in some of these bigger old companies.
And because of that, when there's not the growth, you have to buy them super cheap. I don't think it trades cheap enough. Over the past 5 years, their dividends only up 13%. It's at 2.5% compound annual growth rate.
The most recent dividend increase is 1.82%. And over the past 5 years, it's right in the middle fair value of its dividend yield, how it's traded, right in the 50th percentile, right on the median.
So, while I like a lot of the brands they own, if you don't know, they own GIF Peanut Butter. They own Uncrustables. Uncrustables is a awesome business. It's a cash cow. It's getting copycatted left and right.
You got all those sports people investing in the jams thing. You got some Silicon Valley people invested in some like high-tech version of it. I forget I forget what that one's even called.
That's not a bad thing though because they have the most recognizable brand in that category and it will continue being a big seller. WSM stock. This is a dividend growth company.
It's done much better over the past 5 years than those two other examples. And their dividend growth has been higher up 157% over the past 5 years. That's 20.8%. Keer forward-looking dividend yields 1.28%.
Big dividend growth stock here. However, it is trading at a historically low dividend yield right now. So, the stock price appreciation has been outpacing the dividend growth.
What this channel has said about $WSM
Dividend Data has only this one call on this stock.