One company that has been performing well of late is Williams-Sonoma (NYSE:WSM). The popular home retailer released its earnings last week and they were good enough that the company decided to not just raise its dividend but also announce plans to buyback shares.
For the fiscal year ending Jan. 29, the company's net revenue of $8.7 billion grew by 5.2% from the previous year. Its comparable brand revenue was up 6.5%, and when looking at a three-year comparable, that percentage jumps to 45%. Meanwhile, the company's diluted earnings per share of $16.32 was up by 11% year over year.
It was a stellar performance by the company and as a result, Williams-Sonoma announced that it would be increasing its dividend by 15%. At $0.90 every quarter, the new dividend will pay $3.60 on an annual basis, putting its yield at around 3.1%. That's well above the S&P 500 average, which is approximately 1.7%.
Investors will also benefit from a generous new stock repurchase authorization, which the Board of Directors approved for $1 billion. Share buybacks can help lift a stock's price and lead to a higher price and a better return.
Williams-Sonoma stock could use a boost, as it isn't trading far from its 52-week low of $101.58. Trading at less than eight times earnings, the stock provides investors with some good value and offers a margin of safety in case there are some headwinds that lead to trouble for its financials in future quarters. But with the business showing strength and resiliency, this can be a solid dividend stock to hang on to buy right now.
