A standard Best Buy location. Image credit: The Motley Fool.
It seems safe to say that Best Buy and GameStop leave a lot to be desired when it comes to the potential for large increases in their share prices, but the investment thesis in these companies becomes brighter when dividends are thrown into the mix.
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If we compare Best Buy to GameStop in terms of the three most-important dividend metrics, as I do in the brief slideshow below, we find that:
- Shares of Best Buy and GameStop have unusually generous dividend yields, both of which handily exceed the average yield on the S&P 500 of 2.11%.
- Although both companies have reasonable payout ratios, from 38% to 52%, one is clearly better than the other.
- Finally, Best Buy and GameStop's dividend histories seem to suggest that their payouts will increase in time, as both companies have consistently increased the size of their distributions over the past few years.
Similarities aside, if an income investor had to choose between these two stocks based off these three metrics alone, then Best Buy seems to take the cake. To see why, simply scroll through the brief slideshow below.
The article Better Dividend Stock: Best Buy or GameStop? originally appeared on Fool.com.
John Maxfield has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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