%EthanAllenInteriors (NYSE: $ETD) is a fairly well-known American retailer of home furnishings. It’s also a micro-cap stock that offers its shareholders a huge dividend payment.
With a market capitalization of only $705 million U.S. (less than $1 billion U.S.), Ethan Allen is the smallest of small-cap stocks, known as a micro-cap.
Despite its small size, Ethan Allen pays a quarterly dividend of $0.39 U.S. per share, giving it a hefty yield of 5.62%, better than most larger stocks that can be found in the S&P 500 index.
ETD stock is also currently trading at an attractive valuation of 11 times this year’s earnings estimates. By that metric, Ethan Allen’s shares look cheap.
And although there are growing concerns about a slowdown in consumer spending and possible recession in the U.S., Ethan Allen’s stock has held up comparatively well.
Year-to-date, Ethan Allen’s shares are flat (down 0.36%). That’s much better than the nearly 10% decline in the benchmark S&P 500 index.
Over the past five years, ETD stock looks even better, having increased an impressive 157%.
Analysts credit the company’s chunky dividend for both attracting and retaining shareholders who like the strong and consistent payout.
As for its business, Danbury, Connecticut-based Ethan Allen is going strong, growing its customized furniture business slowly and steadily across the U.S. and Canada.
The fact that Ethan Allen manufacturers all its furniture domestically in the U.S. (mostly in North Carolina) helps to insulate the company from import tariffs and trade tensions, say analysts.
A going concern since 1932, Ethan Allen has weathered many economic cycles in the past and its management team has the experience to weather market ups and downs.
Put it together and ETD stock looks like a good choice for the moment we’re now in.
