American Eagle Outfitters Looks Like A Cheap Dividend Clothier For 2020

Segments of traditional brick-and-mortar retail continue to get squeezed by e-commerce, and one of the hardest-hit areas has been clothing. According to the U.S. Census Bureau, clothing and accessory store sales are down 0.6% in 2019 compared with a 3.2% rise for retail overall and a 12% rise for e-commerce.  

One chain that has been dealing with changing times effectively is American Eagle Outfitters (NYSE: AEO). With changing trends and online retail altering the way consumers shop, the company has remained relevant and is still growing. The stock, though, would indicate otherwise. Shares were down 26% in the last year compared with a 27% increase for the S&P 500. But valuation is not quite matching reality, and this is starting to look like one cheap dividend stock -- if the growth story can continue.  

Revenues at American Eagle are up 7% through the first three reported quarters of 2019, with total comparable sales (or comps, a blend of foot traffic and average purchase size) up 4%. That includes a rock-solid 5% rate during Q3. So what's up with the wanton selling of the stock?  

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Source Fool.com