Retail Earnings Underway With Target, Walmart Results: Which Of These 5 Retail Stocks Offer Best Dividends?

As we progress through the second quarter earnings season, many top retailers are reporting earnings this week.

With first quarter earnings reportedly weak for many retailers due to large amounts of sitting inventory, companies such as Target Corporation TGT missed on Q2 earnings while meeting revenue predictions, and Walmart Inc WMT beat both EPS and revenue estimates for Q2.

Meanwhile, Best Buy Co Inc BBY and many others will be looking to report stronger earnings this quarter as they push out excess inventory.

If you're looking for retail stocks to hedge against inflation risk or capture profits headed into the holiday season, a simple way to do this would be to invest in retail stocks offering dividends.

Retail Dividend Stock #1: Altria Group Inc MO
Dividend Yield: 7.95%
Annual Dividend: $3.60
Frequency: Quarterly
Sector: Consumer Staples

Altria Group has a solid track record of increasing its dividends for 13 consecutive years and is composed of Philip Morris USA, U.S. Smokeless Tobacco, John Middleton, Helix Innovations, and Philip Morris Capital. The company holds 10% interest in the world's largest brewer, Anheuser-Busch InBev BUD, and has the leading cigarette brand in the U.S. known as Marlboro, with a 43% share in 2020, while also holding strategic investments in JUUL Labs (35% economic interest) and 42% interest in Cronos Group CRON.

As of June 30, 2022, Altria had approximately $750 million remaining under its existing $3.5 billion share repurchase program, which is expected to be completed by year-end.
Retail Dividend Stock #2: Kohl's Corporation KSS
Dividend Yield: 6.05%
Annual Dividend: $2.00
Frequency: Quarterly
Sector: Consumer Discretionary

Kohl’s Corporation operates 1,165 department stores in 49 states that sell moderately priced private-label and national brand clothing, shoes, accessories, cosmetics, and home furnishings and has a track record of increasing its dividends once over the past year. In the first quarter of 2022, Kohl’s missed earnings per share estimates by 84.29%, as revenue was down $3.71 billion from the prior year first quarter of $3.89 billion.

“The year has started out below our expectations. We continue to expect our business to improve as the year progresses, with growth in the second half as we benefit from the roll out of 400 additional Sephora stores, enhanced loyalty rewards and further investment in our stores,” said Michelle Gass, Kohl’s chief executive officer.

Retail Dividend Stock #3: Foot Locker Inc FL
Dividend Yield: 5.09%
Annual Dividend: $1.60
Frequency: Quarterly
Sector: Consumer Discretionary

Foot Locker has a track record of raising its dividends in the past two years and mainly sells athletically inspired shoes and apparel under the brand names Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports, Eastbay, atmos, WSS, Footaction, and Sidestep. As of 2022, Footlocker operates 2,858 retail stores in 28 countries, located in the United States, Canada, Europe, Australia, New Zealand, and Asia. The company also has 142 franchised stores located in the Middle East and Asia.

In the first quarter of 2022, Footlocker saw total sales increase by 1%, while comparable-store sales decreased by 1.9%, and repurchased $89 million in stock.

Also Read: These 5 Dividend Payers Just Got A Lot More Attractive: Passive Income For Investors In The Energy Sector

Retail Dividend Stock #4: Best Buy Corporation Inc BBY
Dividend Yield: 4.33%
Annual Dividend: $3.52
Frequency: Quarterly
Sector: Consumer Discretionary

Best Buy Corporation has a noticeable track record of raising dividends over the past 20 years, and is the largest pure-play consumer electronics retailer in the U.S. The company generates the bulk of its sales from its three largest categories including in-store, with mobile phones and tablets, computers, and appliances. As of 2022, Best Buy operates 1,144 stores, while management estimates that at least 30% of future sales will come from its e-commerce channel.

The company expects second quarter 2023 comparable sales to decline by approximately 13%, compared to 19.6% comparable sales growth in the second quarter of 2022.

Retail Dividend Stock #5: Walmart Inc WMT
Dividend Yield: 1.69%
Annual Dividend: $2.24
Frequency: Quarterly
Sector: Consumer Staples

Walmart has an amazing track record of increasing its dividends for 49 consecutive years and is America's largest retailer by sales. The company operated over 10,500 stores under 46 banners in 24 countries at the end of fiscal 2022, selling a variety of general merchandise and grocery items. Walmart's total revenue was up 8.4% for the second quarter as U.S. comparable sales grew 6.5%, and Sam’s Club comparable sales increased 9.5%, with member count at an all-time high.

Doug McMillon, President and CEO of Walmart said, “The actions we’ve taken to improve inventory levels in the U.S., along with a heavier mix of sales in grocery put pressure on profit margins for Q2 and our outlook for the year.”