Gamestop Throws 9% Yields In A Gamer's Paradise
This week I'm seeking a prestigious and long-term dividend-paying stock from the consumer cyclical sector.
That cyclicals sector includes twenty-eight industries ranging from Advertising Agencies to Apparel, Autos, Broadcasting, Department Stores, Gambling, Leisure, Lodging, Packaging, Personal Services, Shoes, Restaurants, Rubber, Plastics, Textiles, and all such consumer aimed enterprises.
Today I'm reviewing a small-cap specialty retail chain named The GameStop Corp. Its trading ticker symbol is GME.
GameStop Corp. is a multichannel video game retailer. It sells new and pre-owned video game hardware, physical and digital video game software and accessories through retail stores.
It operates in five segments: United States, Canada, Australia, Europe, and Technology Brands. The company sells new and pre-owned video game hardware; video game software; pre-owned and value video games; video game accessories,
In addition, the company operates e-commerce sites under the GameStop, EB Games, Micromania, and ThinkGeek brands; collectibles stores under the Zing Pop Culture and ThinkGeek brands; and Spring Mobile, an authorized AT&T reseller operating AT&T branded wireless retail stores.
Further, it provides Game Informer magazine, a print and digital video game publication; and operates Simply Mac, an authorized Apple reseller that sells Apple products, including desktop computers, laptops, tablets and smartphones, and related accessories and other consumer electronics products, as well as training, warranty, and repair services.
As of March 28, 2018, the company operated approximately 7,200 stores across 14 countries. It primarily operates its stores under the GameStop, EB Games, and Micromania brands.
The company was formerly known as GSC Holdings Corp. GameStop Corp. was founded in 1994 and is headquartered in Grapevine, Texas.
I use three key data points to gauge the value of any dividend equity or fund like GameStop Corp. (GME):
(1) Price
(2) Dividends
(3) Returns
Besides those three, four more keys will finally unlock an equity or fund in which to invest.
But those first three primary keys, best tell whether a company has made, is making, and will make money.
GME Price
GameStop's price per share was $16.19 at yesterday's market close.A year ago its price was $20.19 for a loss of $4 per share.
Assuming GameStop's price will trade in the range of $12 to $21 next year, GameStop's current $16.19 price to $17.19 by mid-September, 2019.
GME Dividends
GameStop's most recent quarterly dividend was $0.38 declared September 4th and payable October 2nd. That dividend was increased from $0.37 in March 2017.
At this most recent $0.38 quarterly pay rate, GameStop's annual dividend is calculated at $1.52 yielding 9.4% at yesterday's closing $16.19 price.
Gains For GME?
Adding the $1.52 estimated annual dividend to my $1.00 speculated annual price gain for GameStop makes a $2.52gross annual per share gain, which is reduced by costs to trade the shares.
A little over $1,000.00 invested today at the $16.19 recent price buys 62 GameStop Corp. (GME) shares.
A $10 broker fee paid half at purchase and half at sale costs $0.16 per share, subtracting that $0.16 brokerage cost from the estimated $2.52 gross gain leaves a net gain of $2.36 X 62 shares = $155.76 or a 15.5% net gain on a $1,003.78 investment.
Therefore, GameStop Corp., whose trading ticker symbol is GME, now shows a possible 15.5% net gain including a 9.4% dividend yield.
Eleven brokers cover this stock:
Four say "buy" GME.
None say GME will "outperform" its peers.
Five say GME is a stock to "hold".
One says GME will "underperform".
One says "sell' the stock.
Thus, the analyst consensus recommendation number is 2.5 or "hold".
The median price target set by those eleven brokers is $1.19 under the current price and $2.19 under my year over year price target.
So, you could look at all these various numbers this way, GameStop Corp., whose trading ticker symbol is GME,has made money, is making money, and could net a 15.5% net annual gain including a 9.4% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. Actual results remain to be seen. Those results will determine if GameStop Corp. (GME) is worth your time and money.
Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...
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