Entering text into the input field will update the search result below

Is Big Lots A Big 'Buy' Ahead Of Earnings?

Feb. 04, 2019 6:03 PM ETBig Lots, Inc. (BIG)TJX7 Comments
Dividend Diplomats profile picture
Dividend Diplomats


  • Big Lots continues to trade at a multiple significantly below the market (8.56X P/E).
  • The company reported a surprise Net Loss in Q3, due to increased SG&A expenses.
  • The company is currently in the middle of $250M to create the "Store of the Future."

Today, I wanted to perform a dividend stock analysis on a company headquartered in my home state. The Buckeye State, aka, Ohio. In our journey to find undervalued dividend growth stocks, today's analysis will focus on a company that provides their customers with frequent discounts on everyday home goods, furniture, food. Their tagline says it all: Serve Big. Save Lots. They aren't a discount store, and they aren't a big-box retailer. They are Big Lots, Inc. (NYSE:BIG). After their recent quarter, the price fell dramatically. But, are they considered an undervalued dividend growth stock? Well, let's roll up our sleeves and find out!

The "Store of the Future"

Big Lots operates in nearly all 50 states (47) and has over 1,400 stores. Interestingly, in an era where some retailers are shrinking their footprint, Big Lots is doing the opposite. In fact, the company recently announced the opening of 17 new stores on the same day in the fourth quarter! But this store opening was not an isolated incident. Rather, it is part of a larger store expansion and remodeling plan. Performing more research, I stumbled across this great article published in 2017 discussing the expansion plan. Big Lots is labeling this growth and remodeling as the "Store of the Future." Big Lots estimates this strategy will cost over $250M (M = million) during the period.

What is the company spending this capital on? Implementing the company's new strategy and store format. As a part of the "Store of the Future" concept, the strategy will focus on placing certain goods, such as furniture, seasonal items, and soft home, at the front of the store to capture customers attention. On top of it, the chain is commuting to improving the in-store shopping experience.

My instant reaction to reading the new store format

This article was written by

Dividend Diplomats profile picture
Two guys who love Investing, Dividends, Frugality, Passive Income & attempting to Reinvest Our Dividends to one day achieve Financial Freedom! Follow us on your journey towards a work-free life! We share EVERY ASPECT of our journey on our blog, social media, and YouTube Channel. Make sure to follow us so you don't miss an update. Updates include the stocks we are watching, buying, selling, and our overall thoughts about the the marketBlog: http://www.dividenddiplomats.comYouTube Channel: www.youtube.com/dividenddiplomatsTwitter: https://twitter.com/DvdndDiplomats

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.