Dillards Story

DDS -- USA Stock  

USD 64.13  1.10  1.75%

Macroaxis News
  
By David Taylor

You can tell a lot about a car just by looking under the hood.  Well, that may have been the case long before the modern cars of today when you consider how the engine appears to be buried under some huge cover.  Now, you really have to do some digging around to get to see what is really going on.  

Dillard’s is almost like a car in that regards.  You know it is a retailer.  We have all heard of it, even if we have not had the fortune of walking into one of these stores.  After doing a healthy sifting around this company popped up in my screener.  I had seen it before but passed.  Now, after digging around, looking beyond the hood, if you will, I think I have found something very enticing.  

Dillards is a stronghold of opportunity in the retailing business.

This stock has been left behind in the most recent rallies on Wall Street.  That is unusual when you sit down and parse out the revenue, earnings and profits.  Check out what Dillards has to offer your portfolio.  This is a real hidden gem with a lot of long term potential.




 

You can tell a lot about a car just by looking under the hood.  Well, that may have been the case long before the modern cars of today when you consider how the engine appears to be buried under some huge cover.  Now, you really have to do some digging around to get to see what is really going on.  

Dillard’s is almost like a car in that regards.  You know it is a retailer.  We have all heard of it, even if we have not had the fortune of walking into one of these stores.  After doing a healthy sifting around this company popped up in my screener.  I had seen it before but passed.  Now, after digging around, looking beyond the hood, if you will, I think I have found something very enticing.  

Here is the company’s basic financials from the past several years to include revenue, operating profits and earnings per share.  

2011:   $6,399.80 $473.50    $8.67

2012: $6,751.60 $550.60    $6.98  

2013: $6,691.80 $553.70    $7.10 

2014: $6,780.10 $569.20    $7.79  

2015: $6,754.50 $466.70    $6.91  

Honestly, I almost fell asleep when I saw these numbers.  Consistent.  Steady.  Unremarkable.  

Mind you, there is nothing wrong with that.  In fact, I would much prefer that kind of company when it comes to adding something into my portfolio.  But, before I add something into my portfolio, and after I have seen the numbers, I want to know what I am about to pay for this company.  That is when things went from boring to really interesting.  

Dillard’s is trading at $65 per share.  Last year’s earnings per share came in at the above mentioned $6.91.  That means the company is trading at less than 10-times earnings.  So, what I am seeing si the potential to get a consistently earning company with consistent earnings - a small amount of long term debt - at a price that gets me about 10% return on an annual basis.  Sign me up.  

Mind you, there must be some kind of catch.  I could not readily find one.  In fact, I started to consider the other side of “catch” and look at the fundamentals.  For instance, retail sales numbers were released the past few days for the United States.  There was an improvement in the year-over-year numbers from 3.8% to 4.1%.  What is happening is that consumers are earning more and more, and I expect that trend to improve significantly over the next several years.  And, with those improved earnings, these same consumers are spending more and more at shopping malls and department stores.  The economic position for Dillards is looking brighter, and that brighter analysis is coming from a position of doing very well to begin with.  

As I said, I sort of like boring and predictable when it comes to adding a company into my portfolio.  I will pass on exhilarating.  I think Dillards qualifies as boring and predictable.  Predictably, the company can print profits and earnings with the same speed at which they are doing so.  This makes this company more like an energy company in a lot of ways.  From here, however, I also see potential for growth with the expansion of the economy.  That growth potential will translate into revenue growth and earnings growth.  That will propel the company’s stock forward.  The current less-than 10-times earnings ratio is low and I expect that to turn significantly.  In fact, if the company were to be merely average, trading at 15-times earnings, this stock would be trading above $100 per share, a nearly 50% return.  

I am going shopping.  Dillard’s has made my list of things to buy. 

Dillards Valuation Drivers

Dillards exotic insider transaction detected

Dillards insider trading alert for general transaction of common class a by Lucie Denise Alexandra, Vice President, on January 3, 2019. This event was filed by Dillards Inc with SEC on 2019-01-03. Statement of changes in beneficial ownership - SEC Form 4 [view details]   

About Contributor

David Taylor
   David Taylor is a Senior Member of Macroaxs Editorial Board - Sector Analysis. David is a professional writer who writes for multiple investment news outlets. His primary focus is dynamic movements in financial markets and effects of economic volatility on North American industries and sectors. David has many years of experience in financial service industry including working with major banks as a FX trader. In his free time, he does a lot of outdoors type activities including rock climbing, mountain biking, hiking, mountaineering and kayaking in the summer, and snowboarding in the winter. View Profile
This story should be regarded as informational only and should not be considered as solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC.

Story Momentum

This article from Macroaxis published on 19 of January contributed to the next trading period price escalation.The overall trading delta to the next next day price was 1.69% . The overall trading delta when the story was published to current price is 15.99% .

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Price to Earning

Price to Earning Comparative Analysis

Dillards is rated below average in price to earning category among related companies. Price to Earnings ratio is typically used for current valuation of a company and is one of the most popular ratios that investor monitor on a daily basis. Holding a low PE stock is less risky because. When a company's profitability fall, it is likely that earnings will also go down..In other words, if you start from a lower position your downside risk is limited. There are also some investors who believe that low Price to Earnings ratio reflects the low pricing because a given company is in trouble. On the other hand, a higher PE ratio means that investors are paying more for each unit of profit.
Additionally see Dillards Hype Analysis, Dillards Correlation and Dillards Performance. Please also try Watchlist Optimization module to optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm.
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