Williams-Sonoma's Dividend Yield Above 2%


Home furnishings chainWilliams-Sonoma ( WSM ) raised its dividend in March and now has one of the highest yields in its industry.

The annualized dividend yield is above 2% based on its recent share prices. The company pays a quarterly dividend of 31 cents a share, after increasing it 41% from 22 cents on March 19.

At the time, Williams-Sonoma also set a $750 million stock buyback, to be executed over a three-year period.

The dividend was 10 cents a share in January 2007. IBD calculates a three-to-five-year dividend growth rate of 18%, and the pace of that dividend growth is among the most steady in IBD's database.

The company's earnings growth also is steady. Its three-year Earnings Stability Factor is 7 on a scale of 0 (calm) to 99 (wild).

Earnings-per-share gains have ranged from 8% to 21% the past eight quarters, following the wild increases and declines during the recessionary and recovery years of 2008-10.

Williams-Sonoma's three-year EPS growth rate is 22%, seventh in the industry group.

The retailer operates the Williams-Sonoma, Pottery Barn and West Elm chains plus several online stores.

The home furnishings industry has vaulted in recent weeks as part of a broad advance in some housing-related stocks. The industry group ranked sixth out of 197 groups in Monday's IBD, from 48th just three weeks earlier.

New brands and spinoffs have played a key role in the company's growth. The company says 75% of revenue comes from brands that it has developed.

The stock appears to be forming a new base, although its Accumulation-Distribution Rating is low.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: WSM

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