A Yield to Caution

Article Excerpt

BED BATH & BEYOND INC. $12.43 (Nasdaq symbol BBBY; Shares outstanding: 138.1 million; Market cap: $1.7 billion; Dividend yield: 5.1%; www.bedbathandbeyond.com) sells a wide range of home furnishings and other merchandise for the home. It operates under the names Bed Bath & Beyond, Christmas Tree Shops, andThat!, Harmon, Face Values, buybuy BABY, and World Markets. The company has 1,560 stores, including 1,018 Bed Bath & Beyond locations, mostly in the U.S. and Canada. The company pays a quarterly dividend of $0.16 for a very high 5.1% yield. Like many brick-and-mortar retailers, it continues to lose sales to online specialists like Amazon and Wayfair. Chains such as Walmart have also invested heavily in e-commerce, streamlined their supply chains and added exclusive product offerings online. That strong e-commerce competition resulted in a 48% drop in profits for the company in the latest quarter from a year earlier. Its same-store sales have also fallen for six consecutive quarters. Bed Bath & Beyond now aims to boost its own digital selling channels. It…

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