GameStop (NYSE:GME) lost about 40% of its market value over the past three years, as rising digital downloads and declining mall traffic throttled its growth. However, that plunge reduced GameStop's forward P/E to 6 and boosted its forward dividend yield to nearly 10%. Do that low valuation and high yield make GameStop an undervalued income stock? Or is that high yield a red flag indicating that its core business is deteriorating?
Is GameStop an undervalued income stock? GameStop's stock is cheap for obvious reasons, and I don't think the dividend is worth the risk. The dividend could be easily sustained by its FCF after the Spring Mobile deal, but that cash would arguably be better spent on improvements to its core businesses.
Source: Motley Fool
Related Articles:
- Finding Low Risk Dividend Stocks
- 10 Fun Facts That You Might Not Know About Microsoft
- 5 Dividend Stocks To Beat The Wall Street Giants
- A Disciplined Approach To Dividend Growth Stocks
- 3 Low Beta, Higher Yielding Dividend Stocks For The Next Downturn
Should You Buy GameStop Stock for Its 10% Dividend Yield?
Posted by D4L | Friday, February 15, 2019 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
In an attempt to put a lid on inflation, the Federal Reserve has stated that it intends to raise its benchmark federal-funds rate by 0.25% a...
-
If you have contemplated selling shares of some of the companies you own this year, you likely aren't alone. Considering how volatile th...
-
Readers may want to do a stock valuation on the stocks in their favorite sectors and wait patiently until they become cheap. Patience is a v...
-
Dividend growth stocks are among our favorite investment groups because you get so much bang for your buck. Not only do the companies pay di...
-
Dividend utility stocks might seem bad for your portfolio during high inflation and rising interest rates. However, the sector has done well...
-
Companies that have either been through past downturns or have the pricing power to offset the costs of inflation provide a crucial element ...
-
Dividend reinvestment plans, or DRIPs, can be effective ways to accumulate shares of high-quality companies for those with limited capital t...
-
We picked up two investments that carry excellent yields combined with some healthy upside in the share price. We also dropped one of our po...
-
Do you have the stomach for contrarian investing - betting against the crowd? Sometimes that's necessary in order to find value. Why buy...
-
If you're wishing you had a little more exposure to income investments right now and a little less exposure to growth, you're not al...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.