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In general, retail stocks do not pay high dividends. However, there are some retail stocks that have dividends much larger than their peers. This article will list the 15 highest-yielding stocks in the SPDR S&P Retail ETF (NYSEARCA:XRT). XRT has a total of 100 holdings and pays a yield of 0.87%. All of the stocks listed in this article have yields that are at least double XRT's yield.

Brown Shoe Co Inc (BWS)

  • 2.66% yield
  • 62% payout ratio
  • $380 million net debt

BWS looks well positioned to continue paying its dividend because the payout ratio is relatively low. It should also be noted that BWS will not be able to increase the dividend much because the company has a significant debt load.
Guess Inc (GES)

  • 2.38% yield
  • 27% payout ratio
  • $415 million net cash

GES looks well positioned to not only continue paying its dividend but also to grow it. GES has a low payout ratio and plenty of cash that could be used to increase the dividend.
Limited Brands Inc (LTD)

  • 2.23% yield
  • 34% payout ratio
  • $3 billion net debt

LTD is in good shape to continue paying the dividend because the payout ratio is relatively low. However, LTD does have some debt, which will make raising the dividend less of a priority.
Macy's (M)

  • 2.23% yield
  • 30% payout ratio
  • $6 billion net debt

M is well positioned to continue paying its dividend. M has a low payout ratio and a low debt ratio relative to its size. M is a large retailer, thus is requires a significant amount of debt to finance its inventory.
Foot Locker Inc (FL)

  • 2.47% yield
  • 40% payout ratio
  • $550 million net cash

FL is in a position to raise its dividend. The payout ratio is relatively low and the company has significant net cash.
Wal-Mart (WMT)

  • 2.37% yield
  • 33% payout ratio
  • $50 billion net debt

Don't let the debt fool you, WMT is in good shape to continue paying its dividend. WMT is the largest retailer in the world, thus it requires massive amounts of inventory financing. WMT has always had a high amount of debt but it has never stopped WMT from paying the dividend.
Staples (SPLS)

  • 2.69% yield
  • 29% payout ratio
  • $1 billion net debt

SPLS is well positioned to continue paying its dividend. The company has relatively little debt thus SPLS is well positioned to continue rewarding shareholders.
Safeway (SWY)

  • 2.65% yield
  • 39% payout ratio
  • $5 billion net debt

SWY is well positioned to maintain the dividend. The company has a relatively low payout ratio and is in a very stable retail sector. SWY operates grocery stores, which tend to be less impacted by the ups and downs of the economy.
Cato Corp (CATO)

  • 3.17% yield
  • 43% payout ratio
  • $242 million net cash

CATO is well positioned to increase the dividend. CATO has roughly a third of the company's equity value in cash.
Target (TGT)

  • 2.28% yield
  • 28% payout ratio
  • $18 billion net debt

Similar to WMT, TGT is well positioned to continue paying its dividend even though it has a lot of debt. TGT is a major retailer, which means it needs to finance massive amounts of inventory with debt. This has not stopped TGT from paying a dividend in the past and should not stop TGT from continuing to pay in the future.
Walgreen Co (WAG)

  • 2.72% yield
  • 31% payout ratio
  • $1.4 billion net debt

WAG is well positioned to raise the dividend because the payout ratio and debt are both relatively low. WAG is unique in that a large percentage of its business comes from selling drugs. Drug sales tend to be less effected by the ups and downs of the economy than other parts of the retail sector.
American Eagle Outfitters (AEO)

  • 3.23% yield
  • 46% payout ratio
  • $480 million net cash

AEO is well positioned to raise its dividend because the company has a significant amount of net cash and a relatively low payout ratio.
Supervalu (SVU)

  • 5.15% yield
  • 100%+
  • $6.8 billion debt

SVU will likely be forced to cut the dividend as it is unsustainable based on current earnings. SVU is going through a difficult time and I would strongly recommend investing elsewhere.
Best Buy (BBY)

  • 2.52% yield
  • 22% payout ratio
  • $10 million net cash

BBY looks well positioned to maintain its dividend in the short-term. However, the long term trends for this company and not good. BBY may be forced to cut its dividend if business continues to deteriorate.
Radio Shack (RSH)

  • 6.66% yield
  • 51% payout ratio
  • $1 million net cash

RSH has fallen on difficult times and will likely have a hard time maintaining the dividend going forward.

Investors who are interested in buying retail stocks and generating income should consider the stocks mentioned on this list. It is important to note that some of these companies namely SVU and RSH have fallen on difficult times and might be forced to cut their dividends. For this reason, I would avoid those two stocks even though they are currently the highest yielding of the bunch.

Source: 15 Highest-Yielding Retail Stocks