1 Stock You Have to See to Believe

You want to invest in that ball bearing company that no one else seems to know about. It's this little place out in Wyoming that only makes one thing, but it does it well and the people running the place seem to have a real sense of integrity. I want that, too, but I have a hard time prying myself away from brands -- I just love them.

Which is why I like The Buckle (NYSE: BKE  ) . Buckle has a lot in common with Wyoming Steel and Chain  but with all the benefits of being a place that I can see and interact with. Buckle has strong sales, good management, a history of great dividends, and a brand that's synonymous with quality. If you're looking for a great place to get into retail stocks, I can't think of a better jumping-off point than Buckle.

A range of opportunities
Painting the company in broad strokes, Buckle is a denim retailer. One of the reasons I love the business, though, is that it doesn't just sell its denim. Consider the problems that one-brand-driven denim has by considering Guess? (NYSE: GES  ) .

Revenue and income have been up and down over the last five years, as Guess? has attempted to maintain relevance with a new audience. The company reported a 9.8% drop in comparable sales in its most recent quarter, and overall revenue declined 5%. Guess? has been unable to break out of its mid-'90s pigeonhole as the place to get stonewashed jeans. Even now, the company is chasing trends instead of making them. On the most recent call, the CFO of North America said that the company was going to be pushing the ever-popular "destroyed look."

While Buckle also has to cater to the whims of fashion, the company has the advantage of carrying a wide range of denim brands, which gives it more chances to connect with consumers. Buckle sells its own brand, but also carries Diesel, Lucky Brand, and even Guess?.

Diving into the dividend
The strength of the business isn't the only reason I love Buckle; the company is also very investor-centric. Consider the dividend payout that Buckle regularly puts up. Last year, the company paid out a regular dividend of $0.80 over four quarters. That's about a 1.5% yield, which is roughly in line with that of Gap (NYSE: GPS  ) , another apparel retailer aiming for the same clients.

But hold on. While Gap's 1.5% payout was the end of the story, Buckle also dropped a special dividend of $4.50 per share, at the end of 2012. That "special" dividend has come for years now, and I have no reason to believe that investors won't see it again in 2013. Last year, it bumped Buckle's payout to 9.8%.

That helped Buckle's total return almost match the return of Gap, as shown in the chart below. Considering that last year was Gap's rebound and yet just another good year for Buckle, I know where I'd want to invest.

BKE Total Return Price Chart

BKE Total Return Price data by YCharts.

The bottom line
Buckle is an excellent company with broad exposure to the American denim market. Its management team has proven its ability to keep things running smoothly, and have time and time again given back to shareholders. With fashion as fickle as ever, I like Buckle's odds of keeping ahead of the pack. In fact, each time I look at this stock, I can't believe more people aren't talking about it.

More retail advice from The Motley Fool
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