As Recession Fears Loom, These Retailers' Dividends Are Well-Covered

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Young cheerful Asian woman shopping for accessories in boutique

Images By Tang Ming Tung

The prices of many consumer retailers bottomed out in the summer of 2022 and have bounced solidly since. Is this warranted? Assuming we are coming into a recession, it would be prudent to look at how some of these companies fared during the

Projected EPS Growth 2023 2024 2025
Walmart -6% 8% 9%
Target -59% 75% 15%
Williams-Sonoma 11% 14% 2%
Lowe’s 15% 2% 9%
Best Buy -34% 5% 14%
Tractor Supply Company 9% 11% 6%

Actual EPS Growth 2007-2010 2007 2008 2009 2010
Walmart 8% 9% 8% 7%
Target 18% 4% -14% 15%
Williams-Sonoma -6% 0% -80% 171%
Lowe’s 15% -7% -20% -19%
Best Buy 14% 12% -8% 9%
Tractor Supply Company 8% -9% 44% 43%

Earnings Payout Ratio Entering GFC Peak Payout GFC 2022 2023 est 2024 est
Walmart 23% 28% 34% 37% 35%
Target 14% 21% 23% 69% 45%
Williams-Sonoma 23% 137% 18% 19% 20%
Lowe’s 9% 29% 25% 29% 32%
Best Buy 12% 19% 28% 53% 54%
Tractor Supply Company N/A N/A 38% 39% 39%

Op Cash Payout Ratios Entering GFC Peak Payout GFC 2022 2023 est 2024 est
Walmart 14% 17% 26% 20% 20%
Target 8% 11% 18% 32% 26%
Williams-Sonoma 15% 22% 12% 16% 17%
Lowe’s 6% 15% 21% 22% 25%
Best Buy 10% 12% 21% 47% 33%
Tractor Supply Company N/A N/A 28% 29% 28%

Current Yield Top 10% Top 5% Max Yield
Walmart 1.5% 2.5% 2.9% 3.4%
Target 2.6% 3.5% 4.0% 4.8%
Williams-Sonoma 2.4% 3.0% 3.1% 10.0%
Lowe’s 2.0% 2.0% 2.5% 3.3%
Best Buy 4.1% 3.2% 4.0% 5.8%
Tractor Supply Company 1.7% 1.8% 2.0% 2.1%
Home Depot 2.3% 2.8% 3.0% 4.6%