How Does Ralph Lauren Corporation (NYSE:RL) Fare As A Dividend Stock?

Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Over the past 10 years, Ralph Lauren Corporation (NYSE:RL) has returned an average of 1.00% per year to shareholders in terms of dividend yield. Should it have a place in your portfolio? Let’s take a look at Ralph Lauren in more detail. View out our latest analysis for Ralph Lauren

Here’s how I find good dividend stocks

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Does it pay an annual yield higher than 75% of dividend payers?

• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has the amount of dividend per share grown over the past?

• Does earnings amply cover its dividend payments?

• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

NYSE:RL Historical Dividend Yield June 21st 18

How does Ralph Lauren fare?

Ralph Lauren has a trailing twelve-month payout ratio of 100.37%, which means that the dividend is not well-covered by its earnings. In the near future, analysts are predicting a more sensible payout ratio of 35.87%, leading to a dividend yield of 1.88%. Furthermore, EPS should increase to $5.92, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. RL has increased its DPS from $0.20 to $2.5 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.

In terms of its peers, Ralph Lauren has a yield of 1.79%, which is high for Luxury stocks but still below the market’s top dividend payers.

Next Steps:

Taking into account the dividend metrics, Ralph Lauren ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three essential factors you should further examine:

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

2. Valuation: What is RL 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 RL is currently mispriced by the market.

3. Other 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 pass 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.