By Chuck Carlson, The DRIP Investor

It’s no secret that the Internet has changed the way people shop. And retailers who have not changed their ways and embraced the Internet have been under the gun.

One brick-and-mortar retailer that is doing nice business online is Macy’s (M), which operates more than 800 department stores under the Macy’s and Bloomingdale’s banner. Indeed, online sales for this retailer were up nearly 40% for fiscal 2012 ending in January.

Despite concerns about a cash-strapped consumer, Macy’s has put up strong numbers. Per-share profits in fiscal 2012 ending in January are expected to be $2.81 to $2.83 per share (final numbers were reported after the newsletter went to press), up from $2.03 in the previous year.

Per-share profits have beaten the consensus earnings estimate in each of the last four quarters. A big help to the top and bottom line has been the Internet.

Online sales positively affected the company’s same-store sales numbers in the fiscal fourth quarter by 1.7 percentage points (same-store sales for the quarter overall were up 5.2%).

Thus, the company’s Internet efforts are truly moving the needle and should continue to help the company’s growth.

The firm has been able to continue its streak of 26 consecutive months of year-over-year sales growth. For fiscal 2013, per-share profits should jump 16% to $3.27.

The sharp rise in profits has fueled healthy dividend growth. The company recently doubled its quarterly dividend to $0.20 per share, payable April 2. The yield is now more than 2% and there is plenty of upside for the dividend over the next several years.

Macy’s stock traded well into the $40s in 2006 and 2007, so there appears to be plenty of upside based on historical trading patterns. The stock trades at less than 13 times fiscal 2012 earnings estimates.

Please note that Macy’s offers a direct-purchase plan whereby any investor may buy the first share and every share of stock directly from the company. Minimum initial investment is $500. Subsequent investments are a minimum $50.

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