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4 Days Left Before Chico’s FAS Inc (NYSE:CHS) Will Be Trading Ex-Dividend,

Investors who want to cash in on Chico’s FAS Inc’s (NYSE:CHS) upcoming dividend of US$0.085 per share have only 4 days left to buy the shares before its ex-dividend date, 14 September 2018, in time for dividends payable on the 01 October 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Chico’s FAS’s most recent financial data to examine its dividend characteristics in more detail.

See our latest analysis for Chico’s FAS

Here’s how I find good dividend stocks

When researching a dividend stock, I always follow the following screening criteria:

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  • Is it the top 25% annual dividend yield payer?

  • Has it paid dividend every year without dramatically reducing payout in the past?

  • Has dividend per share risen in the past couple of years?

  • Is is able to pay the current rate of dividends from its earnings?

  • Will it have the ability to keep paying its dividends going forward?

NYSE:CHS Historical Dividend Yield September 9th 18
NYSE:CHS Historical Dividend Yield September 9th 18

How well does Chico’s FAS fit our criteria?

The company currently pays out 47.4% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward.

If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Chico’s FAS as a dividend investment. It has only been consistently paying dividends for 9 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Compared to its peers, Chico’s FAS produces a yield of 4.0%, which is high for Specialty Retail stocks.

Next Steps:

Whilst there are few things you may like about Chico’s FAS from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. There are three fundamental aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for CHS’s future growth? Take a look at our free research report of analyst consensus for CHS’s outlook.

  2. Valuation: What is CHS worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CHS is currently mispriced by the market.

  3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.