The rise of e-commerce heavyweight Amazon over the past couple of decades has highlighted how the retail landscape is noticeably changing. A better experience, with lower prices, fast shipping, and a huge selection, is why people continue to flock to online shopping in greater numbers. 

But not all brick-and-mortar chains are on the decline. Dick's Sporting Goods (DKS 1.43%), which has more than 850 total stores under its umbrella, appears to be doing just fine right now. By focusing on a specific niche, including athletic apparel and equipment, it has still found ways to be successful despite the threat of Amazon. 

After its shares have soared more than 80% in the past year, should investors still be looking to buy this booming retail stock? Here are three reasons why you might want to consider adding Dick's Sporting Goods to your portfolio, as well as some risks to keep in mind. 

Strong momentum 

The business was able to grow its revenue 5.3% year over year to over $2.8 billion during the most recent quarter (the fiscal 2023 first quarter ended April 29) with same-store sales up 3.4%. Net income jumped 17% to total $305 million in the period. These results helped beat analysts' estimates, driving the stock higher following the news.

This continues impressive trends as Dick's Sporting Goods has seen its sales increase at a compound annual rate of 10% over the past five fiscal years. Adjusted diluted earnings per share have skyrocketed at an annualized pace of nearly 40% during that time. Margins have improved substantially, thanks mainly to leveraging fixed costs better as revenue has risen. 

These are truly great numbers for shareholders to see, especially considering the headwinds the industry has faced, from the pandemic and from the popularity of e-commerce in general.

But I think a critical factor that has contributed to the company's success is its focus on bolstering omnichannel capabilities. It has delivery partnerships in place with FedEx, Instacart, and DoorDash. And Dick's says 70% of online orders are fulfilled through its store network, which helps to drive efficiencies that can support higher margins. 

Returning capital to shareholders 

Thanks to its sustainable profitability, Dick's Sporting Goods has done an outstanding job of rewarding its shareholders. Not only has the stock price gone up, but investors have enjoyed the benefit of share repurchases. In fiscal 2022, the company shrank its diluted share count by nearly 10%. 

This has also been a tremendous dividend-paying stock. The company's annual dividend has been growing each and every year since fiscal 2015. Management even paid special dividends in 2012 and 2021. After more than doubling its quarterly dividend recently, the yield is now above a healthy 2%. 

Attractive valuation 

Besides skyrocketing in the past 12 months, the stock has been a wonderful investment over the past five years, up 272% since June 2018. This performance crushes the returns of both the S&P 500 and the Nasdaq Composite Index, which I'm sure is surprising to many investors who tend to expect this kind of return from high-flying tech stocks. 

The stock now trades at a P/E ratio cheaper than its trailing three-, five-, and 10-year averages. For a business that has leading (and growing) market share in a huge $140 billion industry, this might be an attractive price to pay. 

Understand the risks 

While the investment case is compelling, investors need to be mindful of some important risks besides the ongoing threat of e-commerce. 

The first one that comes to mind is the uncertain economic environment. To be fair, Dick's Sporting Goods' latest financial results have demonstrated the company's resilience, even in the face of historically high inflation, although prices across the economy have cooled down somewhat. But a severe recession could hurt sales as people curb discretionary spending. 

It's also critical to think about Nike's importance to Dick's operational success. Of the $12.4 billion in fiscal 2022 revenue, $2.8 billion, or 23%, was from the sales of Nike products. In fact, Nike sales grew much faster than for Dick's overall. As Nike continues to build out its own omnichannel presence, which is something to pay attention to, people will find it even easier to shop there directly. 

If these risks don't scare you away, then it might be a good idea to buy shares of Dick's Sporting Goods right now.