RICHARD SHEINWALD/Bloomberg
Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.
Fashion retailer Dillard's Inc. offers apparel, cosmetics, and home selections. Dillard's stores offer a broad selection of merchandise and feature products from both national and exclusive brand sources. The company operates 274 Dillard's locations and 23 clearance centres spanning 29 U.S. states. Its market cap is $4-billion (U.S.).
Dillard's has grown earnings per share at a 27-per-cent pace over long term (using an average of the 3, 4, and 5 year EPS growth rates). It trades for just 13.2 times trailing 12-month EPS. That and its growth rate make for a strong 0.49 PE-to-growth ratio, part of why the Peter Lynch-based model has strong interest.
The company gets some interest from the Kenneth Fisher-based model, thanks to its 0.62 price/sales ratio, 39-per-cent total debt/equity ratio, and $10.55 in free cash per share.
It has $1.1-billion net current assets vs. $821-million long term debt, which the Benjamin Graham-based model likes. It has a 2.02 current ratio, which the Graham model also likes.
Dillard's has a solid 16-per-cent return on equity and has 8.2-per-cent free cash flow yield.
John Reese is long DDS.
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