Massive 5 Sporting Items Company (NASDAQ:BGFV) Appears to be like Attention-grabbing, And It is About To Pay A Dividend

0
6

Readers who want to buy Big 5 Sporting Goods Corporation (NASDAQ: BGFV) for its dividend will have to make its move shortly as the stock is about to trade ex dividend. The ex-dividend date is usually set to one business day prior to the record date, which is the date on which you, as a shareholder, must be on the company’s books to receive the dividend. The ex-dividend date is important as the settlement process spans two full business days. So if you missed that deadline, you wouldn’t be on the company’s books on the deadline. So, for example, you can buy Big 5 Sporting Goods shares before November 30th to receive the dividend the company will pay out on December 15th.

The company’s upcoming dividend is $ 0.25 per share, after having paid a total of $ 1.00 per share to shareholders over the past 12 months. Looking at the distributions over the past 12 months, Big 5 Sporting Goods has a trailing return of around 3.9% compared to the current share price of USD 25.62. If you are buying this business for its dividend, you should have an idea of ​​whether the Big 5 Sporting Goods dividend is reliable and sustainable. Therefore, we should always check whether the dividend payments appear sustainable and the company is growing.

Check out our latest analysis for Big 5 Sporting Goods

When a company pays more dividends than it deserves, the dividend can no longer be sustainable – hardly an ideal situation. Big 5 Sporting Goods only paid out 14% of its winnings last year, which in our opinion is conservatively low and leaves a lot of scope for unexpected circumstances. However, even highly profitable companies sometimes don’t generate enough cash to pay the dividend, which is why we should always check whether the dividend is covered by cash flow. The good news is that it only paid out 15% of its free cash flow over the past year.

It’s encouraging to see that the dividend is covered by both earnings and cash flow. This generally suggests that the dividend will be sustainable as long as earnings don’t drop abruptly.

The story goes on

Click here to see how much of his winnings Big 5 Sporting Goods has paid out over the past 12 months.

historical dividend

Have profits and dividends grown?

Companies with consistently growing earnings per share are generally the best dividend stocks because they usually find it easier to grow dividends per share. If earnings plummet enough, the company could be forced to cut its dividend. It is encouraging to see that Big 5 Sporting Goods has grown its revenue 46% annually over the past five years. Big 5 Sporting Goods earnings per share sprinted forward like the Road Runner on an athletics day; hardly stopping even for a cheeky “beep-beep”. We also like that it reinvests most of its profits in its business. ‘

Most investors judge a company’s dividend prospects primarily by its historical dividend growth rate. Big 5 Sporting Goods has averaged 13% dividend growth per year for the past 10 years. It’s great to see earnings per share grow rapidly over several years, and dividend per share grow at the same time.

Summarize something

Is Big 5 Sporting Goods an attractive dividend stock or is it better on the shelf? Big 5 Sporting Goods increased its earnings per share while reinvesting in the business. Unfortunately, the dividend has been cut at least once in the last 10 years, but the conservative payout ratio makes the current dividend seem sustainable. Overall, we think this is an attractive combination that is worth further research.

While Big 5 Sporting Goods looks fine from a dividend standpoint, it’s always worth keeping up to date on the risks associated with this stock. Our analysis shows 4 warning signs for Big 5 Sporting Goods and you should be aware of this before buying any stocks.

A common investment mistake is buying the first interesting stock you see. Here is a list of promising dividend stocks with a yield greater than 2% and an upcoming dividend.

This article from Simply Wall St is of a general nature. We only provide comments based on historical data and analyst projections using an unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in any of the stocks mentioned.

Do you have any feedback on this article? Concerned about the content? Get in touch directly with us. Alternatively, send an email to the editorial team (at) simplywallst.com.

LEAVE A REPLY

Please enter your comment!
Please enter your name here