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Buckle (BKE) Boosts Shareholders' Return With Dividend Hike

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The Buckle, Inc. (BKE - Free Report) is cheering investors by enhancing shareholder returns at such times when uncertainties tied to the coronavirus outbreak still persist. Accordingly, the Kearney, NE-based company’s board has authorized a 10% hike in its quarterly dividend to 33 cents per share. This mirrors an increase of 3 cents from the prior payout rate of 30 cents a share. The new dividend will be payable Apr 29, 2021 to shareholders of record as on Apr 15, 2021.

Markedly, the latest dividend will bring the company’s annualized dividend rate to $1.32 per share. Based on the share price of $39.08 on Mar 23, Buckle has a dividend yield of 3.4%. Dividend hikes not only boost shareholder returns, but also raise market value of the stock. Through this, companies try to win investors and persuade them to either buy or hold the stock instead of selling it.

We note that the company, in March last year, had announced suspension of its quarterly cash dividend to preserve liquidity in the wake of the coronavirus outbreak. However, in December, the company’s board authorized a $2.00-per-share special cash dividend in addition to a regular quarterly dividend of 30 cents a share. Both these dividends were paid on Dec 29, 2020. In fiscal 2020, management paid dividends of $128.5 million. The company had cash and investments of $340.5 million at the end of the fiscal year.

What’s More?

Incidentally, shares of this apparel, footwear and accessories retailer have surged 30% over the past three months versus the industry’s rally of 22.7%. Buckle is witnessing strength in its online business amid the pandemic. In the recently reported fourth-quarter fiscal 2020, online sales surged 81.5% year over year to $66.2 million. In fact, the company delivered a stellar quarterly performance with both the top and bottom lines improving year over year. Also, earnings surpassed the Zacks Consensus Estimate for the second consecutive time. Further, margins were impressive in the quarter. Sales benefited from comparable store net sales growth of 18% year over year.



We note that the Zacks Rank #2 (Buy) company’s women’s and men’s merchandise categories are doing well. Apparently, women's merchandise sales improved nearly 20% year over year and that of men's rose 14.5%. While the women's business contributed about 44.5% to the company’s overall quarterly sales, the men’s unit accounted for nearly 55.5%. On combining these two categories, accessory sales for the quarter increased about 14% and footwear sales climbed 58% from the year-ago period.

Other Key Picks in Retail

Abercrombie & Fitch (ANF - Free Report) has a long-term earnings growth rate of 18% and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Tapestry (TPR - Free Report) boasts a long-term earnings growth rate of 10% and currently flaunts a Zacks Rank #2.

Boot Barn (BOOT - Free Report) , also a Zacks Rank #2 stock, has a long-term earnings growth rate of 20%.

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