Kohl’s: An Interesting, Speculative Play In The Retail Sector

Image Source: I was lucky enough to be invited to Manhattan to hang out with some friends recently. Holiday cheer was everywhere, and people were buying into it — literally swiping their credit cards right and left. So, let’s take a closer look at Kohl’s Corp. (), a company I often get asked about around this time, writes Kelly Green, editor of .Estimates tell us the average American spends around $1,000 on gifts and holiday items each Christmas. Collectively, we’re spending more and more on Christmas each and every year. This happens despite concerns about the economy and politics — and the fact that US credit card delinquencies continue to climb higher.So, how does this put more money in our pockets as dividend investors? Well, if a company has a spectacular holiday season, it will show up in its fourth-quarter earnings numbers. And if Q4 sales are able to offset slower growth during the rest of the year, that’s the bonus whipped cream on your pumpkin spice latte.In turn, investors will get excited and send share prices higher during the mid-January through early-March earnings season. If we want to maximize our yield, we need to get shares at the best price — and that means spotting and getting ahead of the trend.To search for potential investments, I set up my stock screener with these filters:

The result was a list of 43 stocks, which included the likes of Best Buy Co. (), Macy’s Inc. (), and Carter’s Inc. (). Near the top of the list was Kohl’s.Shares of Kohl’s stock are down around 76% from their January 2022 highs. Its bargain-basement price means shares now pay a whopping 13% dividend yield. I love a double-digit yield as much as the next girl, but we would definitely be taking on more risk to collect it.In its latest earnings release, Kohl’s missed expectations and lowered its full-year guidance for the second time this year. The company is in the midst of a turnaround plan, something we’ve seen from many companies in the past five years. During its earnings call, the company admitted that some of its earlier decisions were not the best — and it has reversed them.Now, I think the company deserves props for owning its mistakes and changing course. But that still means the company is not as far along in the plan as expected. On top of all that, the CEO plans to step down in January. I’m not sure if that’s a good or a bad thing.All that being said, I think Kohl’s is an interesting speculation play on the holiday season and beyond.My recommended action would be to consider buying shares of Kohl’s.

About the Author
Kelly Green, senior editor at Mauldin Economics, has been a researcher for as long as she can remember. She was always fascinated with taking things apart and asking hundreds of questions—whether it was a car or a complex math equation.Ms. Green turned to a career researching the lucrative field of high-yielding equities. She fell in love with exploring the ins and outs of income-investing opportunities and sell-side options trades.Over the next few years, Kelly would work as co-editor of several income-focused newsletters, chief researcher, and portfolio analyst. She also wrote an educational series for investors covering topics ranging from making first trades to how to trade options.More By This Author:TLTW: A High-Yield, Covered Call ETF With “Safe Haven” AppealCan The S&P 500 Notch Another 20%-Plus Gain In ’25?XSMO: A Momentum Fund Capitalizing On The Solid Economic Backdrop