Owing to weak same-store sales at its retail outlets, apparel store chain Gap (GPS - Get Report) struggled in 2015. With revenue and profits hard to come by, Gap stock lost 41.34% of its value, underperforming both the S&P 500 (SPX) index (down 0.73% in 2015) and the SPDR S&P Retail ETF (XRT - Get Report) (down 9.93% in 2015).

But at Thursday's year-end closing price of $24.70 a share, Gap stock trades at just 10 times fiscal 2016 earnings-per-share estimates of $2.40, or seven points lower than the forward P/E of the average stock in the S&P 500 index. Apply a forward P/E of 17 to the Gap's projected 2016 earnings and that translates to a stock price of around $40, which is some 61% higher than the stock's current price tag.

At the same time, the San Francisco-based retailer pays a strong 23-cent dividend that yields 3.59% annually -- or 1.59 percentage points higher than the 2% yield paid out by the average stock in the S&P 500. And now's the best time to buy.

GPS Chart
GPS data by YCharts

Why? Gap share will trade ex-dividend Monday, Jan. 4, 2016. That's the last day management of the company will finalize its roster of shareholders to whom it will mail dividend checks. Investors who are looking for dividends would do well to add Gap to existing position or building a new position for the long term prior to the ex-dividend date. The Gap will issue a cash payment of 23 cents a share on Wednesday, Jan. 27 to shareholders of record as of Wednesday, Jan. 6.

Beyond its high yield, the company has raised its dividend almost 200% in the past five years -- a trend that should continue, despite the recent weakness in the share price. With consensus fiscal 2017 earnings estimates calling for $2.53 a share -- above 2016 estimates of $2.40 -- Gap is expected to return to earnings growth much sooner than expected. Patience is still warranted here, given the Gap's above-average dividend yield.

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