Shares of Dillard's Inc. closed out 2021 at $245.02 on Friday, a 295% jump for the year, playing a big part in the 62% gain of the Arkansas Index, a compilation of stocks of the largest publicly traded companies based in the state.
"The Bloomberg Arkansas Index posted a remarkable performance in 2021 of over 62.2% compared to the return in 2020 of +1.71%," Leon Lants, managing director at Stephens Inc., said in an email. "The performance exceeded the S&P 500 Index of +27.2% as well as the smaller capitalization Russell 2000 Index return of 13.9%."
The index closed the year at 788.12, up from its 2020 closing of 485.62.
Twelve of the 14 companies in the index posted gains for the year.
Walmart stock was even for the year and America's Car Mart stock dropped from $109 on the opening day of trading about a year ago to a year-end close of $102.19. (Even though Murphy Oil Corp. in late 2020 moved its headquarters from El Dorado, where the company was founded more than 100 years ago, to Houston, Texas, the Democrat-Gazette has retained the company in the index because of its history in Arkansas and its national prominence in the oil and gas industry.)
"Despite a 40% drop in its stock price in the final five weeks of the year, shares of Dillard's managed a 2% gain in the fourth quarter and an astounding 295% in 2021," Chris Harkins, managing director at Raymond James & Associates, said in an email. "This compares to the S&P 500 Retail Select Index, up 41% in 2021."
Dillard's stock hit a per-share high of $410.15 in trading on Nov. 23. The retailer is scheduled to report its fourth-quarter 2021 results on Feb. 22.
"Retail giant Wal-Mart shares took a breather in 2021, finishing the year flat, despite a nice rally in the fourth quarter," Harkins said. "Wal-Mart shares are up 17% over the past two years with the majority of that gain happening between March and November 2020. According to Motley Fool the retailer's first nine months of 2021 saw revenue rise by 3%, while net income fell 35% during that period."
Lants pointed to two sectors -- financials and transportation -- that "contributed greatly to the [index's] performance and dovetailed with some of the major investing themes during the year."
"Financial stocks benefited from the expectation of higher interest rates as commentary by the Federal Reserve pivoted away from supportive monetary policy in an effort to stimulate the economy towards concerns over inflationary pressures above forecasts," Lants said. "Transportation stocks advanced with the perception of a broader recovery in the economy."
The 14 companies in the index are spread across five sectors:
• Banking: Home BancShares, Bank OZK and Simmons First.
• Consumer/Retail: America's Car-Mart, Dillard's, Tyson Foods, Walmart and Murphy USA.
• Energy: Murphy Oil Corp.
• Real estate investment trust: Uniti Group.
• Transportation: ArcBest Corp., J.B. Hunt, P.A.M. Transport and USA Truck.
"Arkansas' transportation stocks had a big 2021," Harkins said. "As a reference, the Nasdaq transport index was up 11% in the fourth quarter and up 21% in 2021."
Harkins noted the increases for specific companies: J.B Hunt shares were up 22% for the quarter and 50% for the year; USA Truck shares rose 27% for the quarter and 121% for the year; ArcBest was up 41% for the quarter and 174% for the year. "And the leader of the pack was P.A.M. Transport Services, up 52% and +187%," Harkins said. "As the economy reopens, these companies benefited handsomely -- not that this industry is free from current challenges in fuel and hiring pressures as costs moved higher throughout 2021."
Lants noted that returns for the index were better in the first and fourth quarters than in the second and third. "Performance across capitalization levels appeared mixed with no distinct advantage between the small cap and larger cap companies," Lants said.
"Our state's banks performed well last year," Harkins said. "Bank OZK led the trio, up 6% in the fourth quarter and up 49% on the year. Pine Bluff-based Simmons shares finished flat in the fourth quarter, yet rallied 37% for the year as they continue to buy bank and related companies, further expanding their footprint. And Conway-based Home BancShares continued its expansion with a recent large buy in Texas, finishing flat in the fourth quarter and up 25% in 2021. This compares to the Nasdaq Regional bank index up 33% on the year."
Tyson Foods, based in Springdale, also reported good earnings, Harkins said.
"Tyson stock jumped 10% in the fourth quarter and finished 34% higher [for 2021]," he said. "Despite the challenges over the past two years, Tyson was able to plow through and its stock sits at a 52-week high and just a few dollars away from its all-time high."