Dividend Growth Stocks Of Tomorrow: Big Lots, Inc.

Nov. 06, 2019 10:51 AM ETBig Lots, Inc. (BIG)8 Comments
Wealth Insights profile picture
Wealth Insights


  • Big Lots, Inc. is a discount retailer that operates 1,400 stores across the United States. The stock offers a strong dividend yield of 5.35%.
  • Operational metrics are declining, but management is investing in the company to reinvent its image and embrace e-commerce.
  • The stock carries execution risk, but a margin of safety is offered. The stock trades at a tremendous discount that offers strong rebound potential.

Dividend growth investing is a popular and largely successful approach to generating wealth over long periods of time. We will be spotlighting numerous dividend up-and-comers to identify the best "dividend growth stocks of tomorrow." Today we look at a retail company in the midst of a transformation in Big Lots, Inc. (NYSE:BIG). Struggling since the recession, Big Lots is rebranding itself and investing in store remodels and e-commerce to revive growth. While the company still has a lot to prove at the operational level, investors can find potential opportunity in a solid balance sheet, high yielding dividend, and cheap stock valuation that provides a margin of safety.


Big Lots, Inc. is a non-traditional retailer that operates in the United States. The company provides both traditionally sourced, and "close-out" merchandise to discount focused consumers. The company offers various types of products for sale including furniture, home goods, toys, electronics, grocery, textiles, and seasonal items. The company operates approximately 1,401 stores in 47 US states.

In a cut-throat industry ripe with competition, Big Lots has managed to survive. With that said, growth has been somewhat lacking over the years. Revenue has grown at a CAGR of just 1.38% over the past decade, while EPS has grown at a CAGR of 4.99%.

source: YCharts

We can see from the historical comparable sales growth of Big Lots, that the business never regained its level of performance from prior to the recession a decade ago. After averaging mid-single digit sales growth in the early 2000s, sales growth has slumped to the low-single digits over much of the past decade.


Before we analyze the company's journey moving forward, we will dive into how efficiently Big Lots has operated as a business. To do this, we will look at a handful of key operating metrics.

This article was written by

Wealth Insights profile picture
I provide straight forward insights on stocks and markets using fundamental analysis and common sense. - Bachelor's degree in Business Administration with a concentration in Financial Analysis. Been investing and following the markets for more than a decade.- Wealth Insights is an investor, and investment author. His content is not geared to anyone's specific investment goals, time horizons, or risk tolerance. Content is for illustrative purposes only, and is not intended to displace advice from a fee based financial adviser. It is not to be taken as investment advice, or influence investor decision making. Accuracy of data is not guaranteed.

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.

Recommended For You

Comments (8)

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.