Office Depot Inc (ODP), OfficeMax Inc (OMX): Staples, Inc. (SPLS) Is Fighting Hard Against Industry Trends

As you can see, Staples and Office Depot Inc (NYSE:ODP), despite their heightened popularity compared to peers, are not impressive fundamentally. That said, Staples truly takes care of its shareholders with a 3.40% yield. And with a strong cash position and decent cash flow, the dividend appears to be safe — at least for the moment.

You might have also noticed the elevated short positions for all of these stocks. The shorts are simply betting against a weak industry. With a hesitant consumer and Amazon stealing market share, it’s a logical bet to make. It should also be noted that with the exception of United Stationers Inc. (NASDAQ:USTR), all of these companies suffered revenue declines in their last fiscal year. This is part of the reason why United Stationers Inc. (NASDAQ:USTR) has outperformed Staples, as well as its peers, over the past several years.

SPLS data by YCharts

The bottom line

Staples is an interesting story. Management is making the correct moves, but even if these moves pay off, they will take time. Staples, Inc. (NASDAQ:SPLS) is rewarding its shareholders for their patience via share buybacks and healthy dividend payments. It’s likely that Staples will expand its online presence, but considering significant headwinds, such as competitive threats, a hesitant consumer, and consumer demand shifting to lower-margin products, don’t be surprised if Staples’ stock remains range-bound for the foreseeable future. You can definitely find stocks with more upside potential, but considering the shareholder-friendly nature of Staples, you could also do worse.

The article Staples Is Fighting Hard Against Industry Trends originally appeared on Fool.com and is written by Dan Moskowitz.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool owns shares of Staples.

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