2. Foot Locker, Inc. (NYSE:FL)
Dividend Yield as of November 1: 5.00%
Foot Locker, Inc. (NYSE:FL) is an American sportswear and footwear retailer company that has operations in over 28 countries worldwide. The company has raised its dividends at a CAGR of 3.65% in the past five years. It currently pays a quarterly dividend of $0.40 per share and has a dividend yield of 5.00%.
In the second quarter of 2022, Foot Locker, Inc. (NYSE:FL) remained committed to its shareholder return. The company paid $38 million in dividends to shareholders and also repurchased 1.4 million of its stocks worth $40 million. Its revenue of $2.07 billion for the quarter came in line with Street estimates.
Ahead of the company’s Q3 results, JPMorgan maintained a Neutral rating on Foot Locker, Inc. (NYSE:FL) with a $37 price target.
The number of hedge funds tracked by Insider Monkey owning stakes in Foot Locker, Inc. (NYSE:FL) stood at 28 in Q2 2022, growing from 21 in the previous quarter. The stakes owned by these hedge funds have a consolidated value of nearly $230 million. Ken Griffin, Cliff Asness, and Israel Englander were some of the company’s major stakeholders in Q2.
Miller Value Partners mentioned Foot Locker, Inc. (NYSE:FL) in its Q1 2022 investor letter. Here is what the firm has to say:
“Finally, Foot Locker (NYSE:FL) came under significant pressure during the quarter, with the stock down more than 50% from its highs and valuation not far from early 2020 lows. Nike continues to place a greater focus on their Direct-to-Consumer business, which will decrease their contribution to Foot Locker’s total sales, retreating to historical averages of 50% by 2023. While a near-term headwind to sales, management plans to offset the lost business by expanding distribution to other leading brands, rolling out larger neighborhood free-standing stores, and expanding two new growth banners (WSS & Atmos). WSS stores will provide an off-mall presence and focus on the rapidly growing and underserved Hispanic market. Atmos will provide Foot Locker with the ability to expand into Japan and Asia sneaker market with their digitally led business model. These new growth concepts have a combined potential to add more than $1B in sales by 2024. The company’s balance sheet remains very strong with $800M in cash and management is increasing returns to shareholders through raising the dividend by 40% and announcing a $1.2B share buyback (more than 40% of the float at current share prices). With the next 12 to 18 months as a transition period for the company, the share price weakness provides attractive reward/risk investment potential, near 3x Enterprise Value/Earnings Before Income, Taxes, Depreciation, and Amortization (EV/EBITDA) and close to a 30% normalized free cash flow yield.”
