As the housing market recovers, homebuilder stocks are not the
only way to get exposure to the trend. Furniture and home goods
retailers likeWilliams-Sonoma (
) provide another alternative.
The operator of Pottery Barn, West Elm, WS Home and
Rejuvenation stores offers investors double-digit bottom-line
growth and rising cash dividends.
On Tuesday, the company beat views with Q4 earnings that
climbed 15% to $1.34 a share. Views were for $1.29 a share.
Williams-Sonoma's profit grew between 13% and 20% in the latest
Thanks to strength at its West Elm stores, sales climbed 11%
to more than $1.4 billion. That marked the third straight period
of accelerating revenue growth, as well as the first double-digit
gain in eight quarters.
Also on Tuesday, Williams-Sonoma upped its quarterly dividend
by a whopping 41% to 31 cents a share. The company started paying
quarterly dividends in 2006. It has more than tripled the payout
The company will distribute the payment May 24 to shareholders
of record April 26.
Williams-Sonoma pays $1.24 a share on an annual basis,
resulting in a yield of 2.5%. That's about the same as the
S&P 500's yield, but it's the highest yield in IBD's
Retail-Home Furnishings industry group.
Besides returning cash to shareholders through dividends, the
company also unveiled a $750 million stock buyback plan Tuesday.
The buyback program is expected to run for three years.
Williams-Sonoma gapped up to a record high Wednesday, then
lost a bit of ground in Thursday's session. With this move, the
stock has cleared a relatively shallow consolidation that dates
back to November and featured resistance around the 47 to 48