Yahoo Finance Only 4 Days Left Until Ralph Lauren Corporation (NYSE:RL) Trades Ex-Dividend,
On the 12 October 2018, Ralph Lauren Corporation (NYSE:RL) will be paying shareholders an upcoming dividend amount of US$0.63 per share. However, investors must have bought the company’s stock before 27 September 2018 in order to qualify for the payment. That means you have only 4 days left! Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Ralph Lauren’s latest financial data to analyse its dividend characteristics.
See our latest analysis for Ralph Lauren
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is it the top 25% annual dividend yield payer?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has it increased its dividend per share amount 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?
How does Ralph Lauren fare?
Ralph Lauren has a trailing twelve-month payout ratio of 81.9%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect RL’s payout to fall to 36.5% of its earnings, which leads to a dividend yield of around 2.0%. However, EPS should increase to $5.98, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. RL has increased its DPS from $0.20 to $2.5 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes RL a true dividend rockstar.
Compared to its peers, Ralph Lauren has a yield of 1.8%, which is high for Luxury stocks but still below the market’s top dividend payers.
Next Steps:
With these dividend metrics in mind, I definitely rank Ralph Lauren as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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. Below, I’ve compiled three relevant factors you should further examine:
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.
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.
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 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.
