Weyco Group (WEYS) is a stock that I have written positively about in the past. But the stock did not do well in 2020 due to the impact that COVID-19 had on the company’s business. This was on top of tariffs and the trade war effects on shoes imported from China. Weyco faced a perfect storm in 2020. Sales were down in by well over -50% in the second quarter and the third quarter was not too much better. That said, rising vaccine distribution in the U.S. and elsewhere portend better times ahead. Weyco’s business will likely recover as offices reopen and life returns to a more normal basis, but it will take time. The new administration has not yet moved to remove tariffs on shoes, but it is now a better possibility. For now, though, Weyco is yielding over 5% and importantly the dividend has not yet been cut or suspended thanks to the fortress balance sheet. In addition, Weyco is a Dividend Champion with 39 years of dividend growth. There is still risk here and the dividend could be cut. But unless 2021 is worse than 2020 from the perspective of COVID-19, Weyco should recover. I view Weyco as a buy.
Impact of COVID-19 on Weyco Group
The COVID-19 pandemic has impacted business around the world but some more than others. The pandemic is having an outsize impact on Weyco. The company mostly sells business and modern casual men’s footwear through department stores, national shoe chain retailers, and its own stores. Obviously, this was not a great business to be in during the COVID-19 pandemic. Sales were punished across all channels and all brands as state and local governments closed malls. Furthermore, many customers that would buy business shoes were working from home as offices were closed or operated at reduced staffing on site…
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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.