Best Buy Company sells consumer electronics, personal computers, software and appliances through 1150 stores in the US and Canada. The company has grown profits in excess of 25% over the last 10 years and its annual dividend from $.27 in 2003 to an expected $.60 in 2010. It has earned a return on equity 20%+ since 1999. BBY stumbled a bit in 2008 as the economy softened. However, it has bounced back since then and should continue to grow as a result of:
(1) continued increases in market share due to its dominant industry position and acquisitions,
(2) each store’s merchandizing is tailored to needs of its local customers,
(3) direct sourcing to the manufacturers allows it to lower product costs and achieve supply chain efficiencies,
BBY is rated A by Value Line, has a 27% debt to equity ratio and its stock yields 1.5%.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio Since 2000
BBY 1.5% 8% 18% 6
Ind Ave 1.0 6 27 NA
Debt/ EPS Down Net Value Line
Equity ROE Since 2000 Margin Rating
BBY 27% 21% 1 3% A
Ind Ave 27 15 NA 4 NA
Chart
Note: BBY stock rebounded nicely off the March 2009 low and ultimately successfully challenged the November 2008 trading high (green line). However, it attempted to break above the down trend off BBY’s October 2006 high (red line) but was unable to do so. In addition, it fell out of the March to present up trend, but stabilized and has since broke above the January to present down trend. The straight blue line is the lower boundary of an up trend dating from 1991. The wiggly blue line is on balance volume.
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Steven J. Cook is president of strategic-stock-investments, LLC, parent of CJS Research, a registered investment advisor. All material presented herein is believed to be reliable but we cannot attest to its accuracy. Investment recommendations may change and readers are urged to check with their investment counselors before making any investment decisions.
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Posted
02-23-2010 3:14 PM
by
Steve Cook