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

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) 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 Jul 30, 2022, Dillard’s operates 250 full-line Dillard’s stores and 29 clearance stores in 29 states and on dillards.com. The company also sells its merchandize through the Internet at www.dillards.com. 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

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Dillard's ten years ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in August 2012 would be worth $4,066.88, or a gain of 306.69%, as of August 15, 2022, according to our calculations. This return excludes dividends but includes price appreciation.

In comparison, the S&P 500 gained 204.45% and the price of gold went up 7.86% over the same time frame.

Going forward, analysts are expecting more upside for DDS.

Shares of Dillard's have lagged the industry in the past three months. The stock came under pressure due to elevated payroll and payroll-related expenses amid the current competitive wage environment. Also, it continues to witness a rising trend in SG&A expenses. The ladies’ apparel category remained sluggish in the second quarter of fiscal 2022. However, the company boasts a robust earnings surprise trend, which continued in second-quarter fiscal 2022. Both top and bottom lines beat the Zacks Consensus Estimate and rose year over year. This marked the ninth straight quarter of an earnings beat. Results gained from the continued momentum in consumer demand. The company witnessed robust sales in cosmetics, men’s apparel and accessories. Also, management’s share repurchases and dividend payments bode well.

The stock has jumped 49.94% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2022; the consensus estimate has moved up as well.

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Dillard's, Inc. (DDS): Free Stock Analysis Report
 
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