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The Street
The Street
Business
Bret Kenwell

Dick’s Sporting Goods Doubles the Dividend. Is the Stock a Buy?

Dick’s Sporting Goods (DKS) stock is catching investors’ attention, with the shares up about 10% at last check.

The rally comes after the retailer reported earnings and more than doubled its quarterly dividend to $1 a share. It now yields about 3%, making it more competitive with that pesky 10-year Treasury yield.

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It also comes alongside a top- and bottom-line earnings beat of expectations, while guidance came in quite strong.

Management expects full-year earnings in a range of $12.90 to $13.80 a share vs. consensus expectations just below $12 a share.

Just a few days ago, Dick’s Sporting Goods stock made Morningstar’s list of undervalued stocks, which in hindsight was a great call.

Trading Dick’s Sporting Goods Stock on Earnings

Weekly chart of Dick's Sporting Goods stock.

Chart courtesy of TrendSpider.com

The reaction to Dick’s Sporting Goods stock is not what we’ve seen from most big-name retailers this year. 

Stocks like Costco (COST), Target (TGT), Home Depot (HD) and others have struggled after the companies reported earnings.

But since Dick's bottomed in mid-2022, the shares have been marching higher. Now, all-time highs are within view.

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With Tuesday’s rally, Dick’s Sporting Goods stock traded up toward $146, which is the 161.8% extension from the recent pullback range. That’s a perfect spot for bullish traders to lighten up on their positions.

If the shares can continue higher, the all-time high at $147.39 is in play. Above $150 and the 261.8% extension of the recent pullback range is in play up near $157.50.

On the downside, the bulls would like to see the shares stay above the February high of $138.43, as well as the short-term moving averages like the 10-day and the 21-day.

So far, Dick's shares are doing an excellent job blocking out the noise and bucking the selling pressure in the overall market. If they keep doing that, traders may have a new stock to ride in what may be a turbulent market.

As always, mind your risk tolerance and realize the trend can change at any time. 

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