Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, apparel retailer The Gap
With that in mind, let's take a closer look at Gap's business and see what CAPS investors are saying about the stock right now.
Gap facts
| Headquarters (founded) | San Francisco (1969) |
| Market Cap | $12.2 billion |
| Industry | Apparel retail |
| Trailing-12-Month Revenue | $14.6 billion |
| Management | Chairman/CEO Glenn Murphy (since 2007) CFO Sabrina Simmons (since 2008) |
| Return on Equity (average, past 3 years) | 25% |
| Cash/Debt | $1.9 billion / $1.7 billion |
| Dividend Yield | 2% |
| Competitors |
American Eagle Outfitters
J. Crew Group TJX Companies |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 37% of the 835 members who have rated Gap believe the stock will underperform the S&P 500 going forward.
Earlier this week, one of those Fools, All-Star JoeAgresti, succinctly summed up the bear case for our community:
Debt has ballooned, margins have compressed ... and they have done nothing to grow Athleta or Piperlime to the point where I can look past it all. This is not a company going into debt to grow the business long term -- this is a company that is making less and less money every single year. Because of the dividend people will blindly go into [Gap] -- and they will all have to head for the exits when the increased dividend becomes a serious drain on the balance sheet. They should eliminate the dividend all together and focus on the stores -- because that is what matters most.
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