Best Buy Company operates more than 1800 retail stores across North America. Photo: Flickr.com/Mike Mozart
About Best Buy Company
Best Buy Company operates a chain of retail electronic stores under the Best Buy brand, with more than 1400 large format stores and 400 smaller format stores across the United States, Canada and Mexico. The company also provides technology repair and troubleshooting services through its Geek Squad brand, and Home Theater solutions through its Magnolia Home Theater brand. The vast majority (more than 90%) of Best Buy’s revenues and profits come from operations in the United States; the remainder comes from Canadian and Mexican operations. The company is headquartered in Richfield, Minnesota.
Best Buy breaks out its revenues into six categories: Consumer Electronics (about 30% of company revenues); Computing and Mobile Phones (45% of company revenues); Entertainment (10% of company revenues); Appliances (10% of company revenues); Services (5% of company revenues) and Other (less than 1% of company revenues).
The company is a member of the S&P 500 index and trades under the ticker symbol BBY.
Best Buy’s Dividend and Stock Split History
Best Buy has grown dividends every year since 2003. The company pays dividends in January, April, July and October and generally announces dividend increases in February, with the stock going ex-dividend in March. In February 2016, Best Buy announced a 21.7% increase to its payout to an annual rate of $1.12 per share.
Best Buy has a good record of dividend growth over the last two years, with 20%+ increases each year. Prior to that, the dividend increases were more modest, resulting in 5- and 10-year dividend growth rates of 12.56% and 12.02%.
Best Buy has split its stock 5 times. The most recent split was a 3-for-2 split in August 2005. Other stock splits occurred in April 1994, May 1998 and March 1999 (all 2-for-1), and in May 2002 (3-for-2). A single share purchased prior to the first stock split in April 1994 would now be 18 shares.
Over the 5 years ending on December 31, 2015, Best Buy stock appreciated at an annualized rate of 0.66%, from a split-adjusted $28.34 to $29.29. This dramatically underperformed the 10.20% compounded return of the S&P 500 index over the same period.
Best Buy’s Direct Purchase and Dividend Reinvestment Plans
Best Buy has both direct purchase and dividend reinvestment plans. You do not need to be a current shareholder to enroll in the plans. The minimum initial investment is $500 and the minimum for additional investments is $50. The dividend reinvestment plan allows full or partial reinvestment of dividends.
Due to their fees, the plans are not very favorable for investors. There is a $10 enrollment fee. For direct purchases, you’ll pay a fee of $2.50 for direct debits from your bank account or $5 for check purchases, plus a 3-cent per share commission. When you go to sell your shares, you’ll pay a transaction fee of $15 plus a commission of 10 cents per share. All fees will be deducted from the sales proceeds.
Current quote and financial summary for Best Buy (finviz.com)