What: Shares of Woolworths Limited (ASX: WOW) have bounced back from recent weakness, climbing around 5% over the last week alone, to once again trade above $28.
So what: Until recently, Woolworths' share price had been on a one-way ticket downward, sliding 22% in the year to July, on the back of a meaningful profit downgrade.
Competition concerns within the supermarket business and a struggling Home Improvement chain have also spooked investors.
Now what: However, it now appears investors may be taking a second look at the retailer's discounted share price. Indeed, at its current price of approximately $28.00, analysts are forecasting Woolies to yield an impressive dividend of 4.94% fully franked in the coming year.
Grossed-up, that's a massive 7.05%, and compares favourably to the 2.4%-2.5% currently on offer from a big bank term deposit or savings account.
Undoubtedly there is more risk involved in buying shares, as opposed to simply opening a term deposit. Nonetheless, if you're confident Woolies can ride out the increased competition in supermarkets and resurrect the flailing Masters business, now may prove to be a great buying opportunity.
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