Why Macy’s 6.1% Dividend Is a Great Deal

Macy’s Inc (NYSE:M) stock has struggled this year as its share price has fallen 18% since the start of 2019. It all started back in January when the company announced that it had a weak holiday season with same-store sales for November and December being up only 1.1%. For retailers, they’re often banking on the holidays to make their year, and in this case, it did the opposite for Macy’s.

This raises a lot of doubts for how the company will be able to perform in 2019. Retailers have been struggling in recent years with many closing up shop completely. While Macy’s doesn’t appear to be at risk, posting healthy profits in each of the past five years, it definitely puts investors on edge.

However, the company is making strides to improve the customer experience to try and get customers back into its stores. It’s working on implementing augmented reality in its Beauty department, which will make it easier for customers to virtually try on products. And that’s just one example of how the company is looking to add value for its consumers. While Macy’s may have had a disappointing holiday season, that doesn’t mean that the stock is hopeless.

The good news is that for dividend investors, this might be a great time to buy up the stock. With a quarterly dividend of 37.75 cents, Macy’s stock is currently yielding over 6.1%, which is a fairly high yield. However, the company has been producing solid numbers to support the dividend which suggests investors don’t have to worry about it being unsustainable as Macy’s has enough free cash flow to cover its current dividend payments.