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Best Buy Overlooked

Best Buy (NYSE:BBY) is a survivor. The company had survived the transition to e-commerce when other competitors did not. Best Buy has arguably figured out how to become an omnichannel electronics retailer competing with much bigger players like Amazon (AMZN), Walmart (WMT), Target (TGT), and Costco (COST). In addition, the COVID-19 pandemic provided a tailwind for computer, electronics, and home theater sales, although that is now slowing. Consequently, the stock price has been down about (-20%) in the past year and (-7%) year-to-date on slowing sales growth. The stock price is also well off its 52-week high. Simultaneously, the dividend yield has risen, and the valuation multiple has declined. Investors should look at this retailer, Best Buy is often overlooked, but it is a buy.

Overview of Best Buy

Best Buy was founded in 1966. Today, the company is the largest electronics retailer in the US and Canada. The company shuttered its Mexican stores in fiscal 2021. It now has about 938 Best Buy stores and 16 Best Buy Outlet Centers in the US, 21 Pacific Sales Stores, 127 Best Buy stores in Canada, and 33 Best Buy Mobile Stand-Alone Stores in Canada. The retailer also operates an e-commerce store. Total revenue was $51,761 million in fiscal 2022 and the past twelve months.

Best Buy sells computers, mobile phones, televisions, appliances, home theater systems, printers, etc. In addition, the retailer sells installation services through third-party contractors. Best Buy’s Geek Squad provides installation and repair services.

Major brands include Best Buy, Magnolia, Pacific Kitchen, Lively, Yardbird, and Home.

Growth and Earnings

Best Buy continues to grow organically, leveraging its status as the largest pure-play electronics and services retailer in North America. Although Best Buy has large competitors, they mainly sell electronics as a part of a larger number of SKUs and are not focused solely on electronics. Furthermore, their focus is often on low-price…

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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.

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