Kohl's Corp (NYSE:KSS)

CAPS Rating: 3 out of 5

The Company operates family-oriented, department stores that feature quality, national brand apparel, footwear, accessories, soft home products and housewares targeted to middle-income customers.

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Player Avatar NovaTodd (36.99) Submitted: 1/25/2013 6:52:30 PM : Outperform Start Price: $43.25 KSS Score: -0.29

Kohl's is a very shareholder friendly company. In addition to a 3% yield, it has decreased outstanding shares at a rate of about 5.5% per year over the past five years. The board recently increased its share repurchase authorization to 3.5 billion dollars, which represents over 33% of the company's current market capitalization. ROE has been very consistent at around 15%, and margins grade out very well relative to industry peers.The growth in e-commerce sales (46% YoY for December) is promising, and this will be an important figure to watch going forward.

As JohnCLeven succinctly chronicled, share price has lagged significantly behind the company's growth in intrinsic value. As a result, P/B is now near 10 year lows, and the stock trades at about six times TTM cash flow. I think this is a great opportunity for the patient investor to harvest the fruits of Kohl's cash generating business and munificent board of directors.

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