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David Tepper Is Betting Big on This High-Yield Dividend Stock. Should You?
Yahoo Financeยท 2025-11-19 18:09
Core Viewpoint - Billionaire investor David Tepper is making a contrarian investment in Whirlpool, a household appliance company, after selling off shares of Intel, which has seen significant gains this year [1][2]. Company Overview - Whirlpool, based in Benton Harbor, Michigan, manufactures laundry and kitchen appliances under various brand names, including Whirlpool, KitchenAid, and Maytag, with a market capitalization of $3.83 billion [3]. Stock Performance - Whirlpool's stock has declined by 40% this year, significantly underperforming the S&P 500 Index, which has gained 12.51% [4]. - The stock is currently down 73% from its all-time high, raising questions about its investment potential [2]. Valuation Metrics - Whirlpool's forward price-earnings (P/E) ratio is 11x, which is less than half of the forward P/E of the S&P 500 consumer discretionary sector, indicating it may be undervalued [5]. - The price-sales (P/S) ratio stands at 0.25x, suggesting that the stock is priced attractively, as a P/S less than 1x is considered a bargain [5]. Dividend Information - Whirlpool pays a dividend of $3.60 per share, yielding 5.3%, although this represents a nearly 50% cut from the previous $7 per share due to weak performance and lower profit forecasts [6]. Earnings Performance - In Q3, Whirlpool reported revenue of $4.03 billion, a 1% increase from the previous year, and earnings of $73 million, down from $109 million a year ago [7]. - The earnings per share (EPS) of $2.09 was a 39% decline year-over-year but exceeded analysts' expectations of $1.41 per share [7].