WSM - Williams-Sonoma: I'm Up 437% And Not Selling This Dividend Growth Machine

2024-03-15 08:00:00 ET

Summary

• Since my buy rating on Williams-Sonoma in November, shares have clobbered the S&P 500 index.
• The company trounced the analyst consensus for net revenue and non-GAAP EPS in Q4.
• WSM’s manageable dividend payout ratio and strong balance sheet support the recently announced 25.6% dividend hike.
• The rally in Williams-Sonoma stock appears to have overextended the valuation.
• I’m happy to keep holding onto this winner, but I’ll be patient and won’t add more WSM shares until a significant correction happens.

As a younger investor, I especially appreciate the wisdom of more learned, world-renowned investors. Quotes from Peter Lynch are among my favorites. Best known as the former mutual fund manager of Fidelity's Magellan Fund from 1977 to 1990, the fund generated 29.2% annual total returns under Lynch's management. For context, that's more than double the annual total returns that the S&P 500 index ( SP500 ) delivered over that time.

One of my favorite quotes from Lynch that applies to my topic of conversation today is as follows:

It only takes a handful of big winners to make a lifetime of investing worthwhile.

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