Yahoo Finance Sleep Country Canada Holdings (TSE:ZZZ) Is Paying Out A Dividend Of CA$0.237
The board of Sleep Country Canada Holdings Inc. (TSE:ZZZ) has announced that it will pay a dividend of CA$0.237 per share on the 30th of May. This means the annual payment is 3.6% of the current stock price, which is above the average for the industry.
View our latest analysis for Sleep Country Canada Holdings
Sleep Country Canada Holdings' Payment Has Solid Earnings Coverage
A big dividend yield for a few years doesn't mean much if it can't be sustained. Based on the last payment, Sleep Country Canada Holdings was quite comfortably earning enough to cover the dividend. This indicates that quite a large proportion of earnings is being invested back into the business.
If the trend of the last few years continues, EPS will grow by 5.6% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 48%, which is in the range that makes us comfortable with the sustainability of the dividend.
Sleep Country Canada Holdings' Dividend Has Lacked Consistency
Looking back, Sleep Country Canada Holdings' dividend hasn't been particularly consistent. Due to this, we are a little bit cautious about the dividend consistency over a full economic cycle. The dividend has gone from an annual total of CA$0.52 in 2015 to the most recent total annual payment of CA$0.948. This means that it has been growing its distributions at 6.9% per annum over that time. We like to see dividends have grown at a reasonable rate, but with at least one substantial cut in the payments, we're not certain this dividend stock would be ideal for someone intending to live on the income.
We Could See Sleep Country Canada Holdings' Dividend Growing
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Sleep Country Canada Holdings has impressed us by growing EPS at 5.6% per year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.
In Summary
Overall, we think Sleep Country Canada Holdings is a solid choice as a dividend stock, even though the dividend wasn't raised this year. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 3 warning signs for Sleep Country Canada Holdings that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
