Recent Buy

I added a new position to my portfolio Williams-Sonoma, Inc. (WSM).

25 Shares @ $48.90 on 6-15-2017

This will increase my forward 12-months dividend income by $39.00 to a total of $3,764.02

I updated my Portfolio Page to reflect the change.

I bought 2 out of the 3 from my Stock Consideration post that I did a few week ago. I wanted to go with GILD, which I should have since it is up almost 9% from when I made that post lol. The reason why I did not buy GILD is that I recently found and learn about WSM and I find it less of a risk because of the long divided track record of 12 years.

Here are some numbers to prove why I think it is a great buy right now.

Current PE: 13.74    5-year average PE: 20.2

Forward PE: 12.35

2016 EPS: $3,37

2017 Estimate EPS: $3.55

2018 Estimate EPS: $3.80

Dividend Payout: 44%

Dividend Yield: 3.31%    5-year average: 2.16%

As you see above, the current PE level is much lower than the 5-year average. Even the forward PE level is lower than the current. Also, looking at the current dividend yield which is way over 100 points higher compared to the 5-year average. Theses two matrices show that WSM is undervalued.

With the payout being at a respectable level, it means that there is plenty of money for sustainable mid to high single digit dividend growth rate.

Here we have different Fair Value estimates.

S&P Capital IQ Fair Value: $52.70

Yahoo Price Target: $53.00

My DDM Analysis: $56.47

As you see above, WSM is very much undervalued right now. If it goes further down, I will be buying more.

Thanks for reading, and don’t forget to follow me:

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Do you like WSM at these prices? What have you been buying?

Image by Sira Anamwong at FreeDigitalPhotos.net