Back to top

Image: Bigstock

Here's How Much a $1000 Investment in Dillard's Made 10 Years Ago Would Be Worth Today

Read MoreHide Full Article

For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.

What if you'd invested in Dillard's (DDS - Free Report) ten years ago? It may not have been easy to hold on to DDS for all that time, but if you did, how much would your investment be worth today?

Dillard's' Business In-Depth

With that in mind, let's take a look at Dillard's' main business drivers.

Dillard's Inc. is a large departmental store chain featuring fashion apparel and home furnishings. As of Apr 30, 2022, Dillard’s had about 251 namesake outlets and 29 clearance centers spanning in 29 states. The company also sells its merchandize through the Internet at Stores are mainly located in the Southwest, Southeast, and Midwest regions of the United States.

The company’s primary product categories comprise women’s and children’s apparel, shoes, accessories and lingerie, men’s clothing and accessories, cosmetics, home, and children’s clothing. Its merchandise mix consists of both branded and private-label items. The company’s strategy is to offer more fashion-forward and trendy products in order to attract customers.

Dillard’s also owns a real estate investment trust (REIT), which helps it to enhance its liquidity position. Revenues of a REIT company mostly come from either rent or mortgage payments. The company has an obligation to distribute at least 90% of its taxable income to investors in the form of dividends. A REIT company does not have to pay taxes at the corporate level.

Moreover, Dillard’s has a wholly owned captive insurance company, which enables it to manage its risks more efficiently and provide access to more reinsurance markets. A captive insurance company is an ‘in- house’ insurance company with limited purpose, which insures the risks of its parent company. The captive insurance company may reinsure some or all risks, or may retain such risks of its parent company. The primary goal of forming a captive insurance company is to retain the profit that would have been made by an outside third-party insurance company or in a situation where the coverage is not available for business risks.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Dillard's ten years ago, you're likely feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in June 2012 would be worth $5,098.75, or a 409.88% gain, as of June 8, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.

The S&P 500 rose 216.40% and the price of gold increased 11.77% over the same time frame in comparison.

Going forward, analysts are expecting more upside for DDS.

Shares of Dillard's have outpaced the industry in a year, courtesy of its robust earnings surprise trend, which continued in first-quarter fiscal 2022. Both top and bottom lines beat the Zacks Consensus Estimate and rose year over year. This marked the eighth straight quarter of an earnings beat. Results gained from the continued momentum in consumer demand and better inventory levels. The company witnessed robust sales in men’s apparel and accessories, ladies, and children’s apparel. This along with improved margins and lower operating expenses as a percentage of sales led to bottom-line growth. However, it continues to witness a rising trend in SG&A expenses. Also, stiff competition and raw material price inflation remain concerns.

Over the past four weeks, shares have rallied 12.62%, and there have been 2 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Dillard's, Inc. (DDS) - free report >>

Published in