(By Kevin Donovan) If past is prologue, Dick's Sporting Goods (DKS) will beat analysts' estimates when it reports second-quarter results today. But positive surprises are a staple of the Wall Street dance these days, and with Dick's trading near its 52-week high, we think a beat is probably priced in.
Nevertheless, we think Dick's will be a solid performer. At $50.54, the shares trade at 17.55 times forward earnings estimates that assume EPS growth of about 15% next year, a premium to the S&P 500 forward multiple of about 15. We think the premium could get richer as Dick's delivers on sporting enthusiasm generated by the just completed summer Olympic Games.
Dick's also recommends itself with a $0.50 annual dividend yielding about 1.00% and 12% insider ownership, aligning management's interests with shareholders'.
Shares have traded between $28.67 and $52 in the last 52 weeks. DKS gained $0.19, or 0.38%, Monday to $50.54 on a day
The company has beaten estimates by 4% and 18.5% in the previous two quarters. For the latest quarter, analysts forecast earnings per share and revenue of $0.64 and $1.44 billion, respectively. Estimates range between $0.63 and $0.66 for EPS and $1.41 billion and $1.48 billion for sales. In the year-ago quarter, Dick's earned $0.52 per share on sales of $1.31 billion.
Dick's offers a full range of sporting goods and apparel at 486 Dick's Sporting Goods stores in 44 states and 81 Golf Galaxy stores in 30 states. Channels include e-commerce Websites and catalog operations.