The Woolworths Limited (ASX: WOW) fully franked dividend looks decent.
Sure, the Woolworths dividend yield is 'only' 3.05% fully franked.
That compares to the Telstra Corporation Ltd (ASX: TLS) fully franked dividend yield of 6.3% and National Australia Bank Ltd.'s (ASX: NAB) 6.2%.
But even still, there is a lot to like about Woolworths and the supermarket chain it operates.
For example, it is still a dominant powerhouse in the defensive consumer space. And between Woolies and Coles – owned by Wesfarmers Ltd (ASX: WES) – there's not that much room for competitors like Aldi and Costco to grow.
However, like all industry leaders, it does have the most to lose. And, so far, it is losing.
Aldi is growing. Coles is flexing its muscle, Costco is only just getting started and Amazon… well, if (when?) it arrives everyone better be at the top of their game.
Is Woolworths bouncing back?
Over the past three years, Woolworths shares have plummeted from around $38 to a low of $20.30 last year. Crappy management was the biggest reason for that fall.
Now, turning around a $32 billion heavyweight is not easy nor done quickly.
But, the good thing about industry leaders is they do have many levers they can pull to reassert their dominance. Woolies shares have recently bounced back to over $25.
Looking ahead
The online world is a major battleground for all retailers, yet it is a service which many consumers haven't taken to for everyday goods.
Six months ago, you could have fed the cat, put out the washing, dried the dishes and gone down the street before the Woolworths website even loaded.
On the other hand, Coles has made inroads for the online world — the Coles website is two to three times faster.
This is only something small of course but Woolies is meant to be the supermarket.
Buy, Hold or Sell Woolworths
In my opinion, an investment in Woolworths shares has a few hairs on it. Meaning, it's not a foolproof investment case. If its new management can turn the ship around, then its shares would be a good buy now. And it's dividend could be expected to increase.
However, I think there are better opportunities available on the market today.
