Is the Gap's (GPS) - Get Report stock still on sale?

Amid the recent market volatility, shares of the apparel retailer -- which are up about 10% year to date, against a nearly 6% decline in the S&P 500 (SPX) -- have been a safe haven for investors who have sought shelter by moving toward strong dividend payers.

The San Francisco-based retailer pays a 23-cent dividend per share for a yield of 3.38% annually. That's 1.38 percentage points higher than the 2.00% yield paid out by the average stock in the S&P 500. The Gap is set to report fourth-quarter fiscal 2015 earnings results after the closing bell Thursday.

For the quarter that ended in December, the average analyst earning-per-share estimate calls for 57 cents a share on revenue of $4.46 billion, compared to the year-ago quarter when the Gap earned 75 cents a share on revenue of $4.71 billion. For the full year, earnings are projected to fall 14% to $2.41 a share, while revenue of $15.87 billion would mark a decline of 3.5%.

Retailers have been punished lately, thanks in part to worse-than-expected results last week from Walmart  (WMT) - Get Report . On the news, Walmart stock plummeted.

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But if the Gap's rising estimates serve as indication, the company is poised to be an exception. In the past 30 days, the Gap has seen estimates for the just-ended quarter rise from 53 cents a share to 57 cents. Estimates for the full year have also risen from $2.37 to $2.41.

Why are estimates rising? After the company struggled in 2015 with weak same-store sales at its Gap retail outlets, management has shifted its attention to better merchandising and improved marketing. These maneuvers have begun to pay off.

Earlier this month, the company revised its earnings-per-share outlook upward, forecasting a range of 56 to 57 cents per share, vs. consensus estimates of 53 cents. The upward revision is important in terms of the stock's valuation. Assuming full-year earnings do reach $2.41 a share, Gap's trailing price-to-earnings ration is at 11, which is nine points below the P/E of the S&P 500 index.

That's a huge discount. When looking out toward fiscal 2016, the discount is even more glaring -- a forward P/E of 10 vs. a forward P/E of 17 for the S&P 500 index.

Gap stock is one of the better bargains in retail.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.