As the U.S. Senate appears to be reaching a temporary agreement to avoid a federal debt default in the next two weeks, the major indices ended Wednesday’s session in the green. Although concerns over COVID-19, inflationary pressure, and supply chain disruptions could be far from over and may cause more volatility in the coming months, the fast-approaching holiday shopping season may boost consumer spending.
In addition, as businesses scramble to increase their investment before their yearly budgets run out, stocks are expected to see solid gains in the coming months.
Dillard’s Inc. (DDS)
DDS owns retail department stores in the southeastern, southwestern, and midwestern regions of the United States. Its stores provide clothing, accessories, cosmetics, home furnishings, and other consumer items. In addition, the company also undertakes general contracting construction work.
Last month, DDS launched Nicola Bathie for Antonio Melani, the company’s latest limited-edition capsule collection, which will be sold exclusively through the Antonio Melani brand. The collection was created in partnership with Nicola Bathie McLaughlin, an internationally recognized jewelry designer and lifestyle influencer located in San Antonio.
DDS’ net sales increased 70.9% year-over-year to $1.57 billion in the second quarter that ended July 31, 2021. Its cash and cash equivalents grew 707.6% from the year-ago value to $669.5 million. The company’s net income came in at $185.7 million for this period, compared to a net loss of $8.6 million in the second quarter of 2020. Its EPS totaled $8.81, compared to a loss per share of $0.37 in the prior-year period.
The company’s EPS is expected to grow 1,245% year-over-year to $31.83 in fiscal 2021. Analysts expect DDS’ revenue to increase 45.4% year-over-year to $6.45 billion in the current year. The stock has gained 382.6% over the past year and 206.8% so far this year.
DDS’ POWR Ratings reflect this promising outlook. The company has an overall grade of B, which translates to a Buy rating in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
DDS also has an A grade for Value, Growth, and Quality. Within the A-rated Fashion & Luxury industry, it is ranked #8 out of 63 stocks.
To see additional grades for Stability, Momentum, and Sentiment, click here.
Mannatech Incorporated (MTEX)
MTEX is a global health and wellness company. It creates, markets, and distributes nutritional supplements and topical and skin care, anti-aging, and weight-control products. The company distributes its products mainly through direct sales, network marketing channels, and a website.
Last month, MTEX announced that its Board of Directors had approved a share repurchase program that will allow the company to acquire up to $1 million of its outstanding common stock. This decision demonstrates the robust financial health of the company.
For the second quarter that ended June 30, 2021, MTEX’s net sales increased 12.9% from the year-ago value to $42.50 million. Its operating income grew 81.8% year-over-year to $2.02 million. The company’s net income surged 88.4% from the prior-year quarter to $2.13 million, while its EPS increased 110.6% from the year-ago value to $0.99.
The company’s EPS is expected to grow at the rate of 17.5% per annum over the next five years. MTEX’s stock has gained 99.6% over the past year and 79.2% year-to-date.
MTEX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall grade of A, which equates to a Strong Buy rating in our POWR Ratings system. MTEX also has an A grade for Value, Growth, and Quality. The stock is ranked #1 out of 71 stocks in the Consumer Goods industry.
Beyond the grades I have just highlighted, you can see MTEX’s grades for Sentiment, Stability, and Momentum here.
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DDS shares were trading at $201.91 per share on Thursday afternoon, up $8.50 (+4.39%). Year-to-date, DDS has gained 221.35%, versus a 19.10% rise in the benchmark S&P 500 index during the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...
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