Why Designer Brands and its 4.4% Yield Could Be a Great Pickup Today

Designer Brands Inc (NYSE:DBI) has fallen 14% in the past month as poor earning results sent the stock over a cliff. Although the company saw good sales in its most recent quarter with its top line rising 16% year over year, investors were not impressed as Designer Brands incurred a loss of $45 million compared to a profit of $12 million in the prior year. Impairment charges and expenses related to an exited business were the main culprits for the disappointing loss.

Although Designer Brands CEO Roger Rawlins didn’t think the results were bad and called 2018 “one of the best years in our Company’s history,” he still sees much bigger things ahead: “we strategically positioned our Company to grow share and enhance profitability through transformative acquisitions, creating an infrastructure that positions us to be a significant force in the footwear industry for years to come.”

Over the past five quarters, the company has twice reported a net loss, although only once was the loss at the operating level. This past quarter was unusual and as long as it doesn’t repeat, Designer Brands could be poised for a bounce back in share price as it’s only a couple dollars away from its 52-week low.

That makes its dividend particularly appealing as it is now yielding 4.4% thanks to the drop in price. For a company with good growth potential and that has hiked its dividend over the years as well, it could be a great opportunity for investors to get in at a reduced price.