Macy’s, Inc. (M): One Great Stock That is Still Pretty Cheap

Everyone loves a bargain, and in the world of retail, Macy’s, Inc. (NYSE:M) is one of the best bargains out there. The company has had strong growth over the past four years, and its plan for the future is solid. Management seems to understand the consumer environment, and takes customers into account when it builds the business. On top of that, Macy’s, Inc. (NYSE:M) is on the cheaper side, no matter how you slice it. Here’s a rundown of why you should consider this solid American brand.

Macy's, Inc

Then and now
We won’t dwell on the past, since it’s not going to help us predict the future, but it would be silly not to hit the highlights. Starting at the top, Macy’s has increased its revenue for four years running, and it hit $27 billion in 2012. Earnings per share have kept up as well, rising from $0.78 in 2009 to $3.29 last year. That’s a 321% increase over four years. To put some context around that, Nordstrom, Inc. (NYSE:JWN) has grown earnings per share by 78% over the same period.

Most recently, Macy’s, Inc. (NYSE:M) has come off a strong start to the year. The end of the first quarter, which finished in January, saw a great deal of foot traffic, and comparable sales grew 3.9%. That growth should push through into 2013, and has boosted the growth that the company has seen through its websites. Online sales were up 48% last quarter, due to the strength of Macys.com and Bloomingdales.com.

The company has guided 3.5% comparable growth for the coming year , which would make four years in a row of growth — a first for Macy’s. One of the key initiatives in place for Macy’s is its training program, which is helping turn the shopping experience into a two-way conversation. That not only helps sales, but it helps deter showrooming, where customers browse in-store then buy online somewhere else. The long-term prospects for Macy’s, Inc. (NYSE:M) look very sound.

Good value
The strength of the business is the most important part of the equation, but there are plenty of other strong businesses. Nordstrom, for instance, has seen fantastic growth and has some cutting-edge omnichannel plans in place. The reason I like Macy’s so much is that it encompasses a lot of the good things that Nordstrom, Inc. (NYSE:JWN) is doing, but it costs less.

In fact, with a P/E of 14, Macy’s, Inc. (NYSE:M) comes in comfortably under the department store average of 16. It’s also kicked out a sustainable 2.2% average dividend over the past five years, which is in line with the average for department stores.

Overall, Macy’s, Inc. (NYSE:M) is a cheap, solid business with an incredibly strong brand. As more chains fall by the wayside, Macy’s should be in line for even more business in the coming years. I love the long-term outlook for this company, and I love the price.

The article 1 Great Stock That’s Still Pretty Cheap originally appeared on Fool.com and is written by Andrew Marder.

Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!