Will Investors Lose Their Shirts Chasing Gap's 6.8% Dividend?
Nasdaq The bad news: Gap, Inc. (NYSE:GPS) shares are down 20% year-to-date and more than 70% from their post-Covid peak.
The good news: the clothes retailer now offers a stylish accessory in the form of a 6.8% forward dividend yield.
As the apparel industry adjusts to new norms in the wake of the pandemic, bolstering omnichannel sales is just part of the challenge. Companies continue to face supply chain snags and cost inflation. Waning demand on top of inventory buildups is yet another problem.
Gap is experiencing all of the above. These pressures have pushed its $9.00 stock down to the cost of a pair of Old Navy socks. But the retailers low share price and high yield may be worth trying on.
Why Is Gap Stock Going Down?
Fittingly, Gap shares gapped down on March 10th after the company reported disappointing fourth quarter results. And with another Fed rate hike likely to impact discretionary spending, the stock has since trended lower.
