Markit expects dividend increase by 20% next week for GME; GME quietly acquired Peachmac in November and thereby doubled the size of Simply Mac overnight to 60 stores and is now eyeing RadioShack leases to expand Spring Mobile.
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Below are summaries of the expected dividend from the Markit note:
GameStop Corp: Markit expects GME to continue increasing its dividends in accordance with earnings growth through FY’16. We expect a 20% jump from GameStop’s quarterly dividend starting Q1 2015, landing the new rate to $0.395 per share. The company has more than doubled its dividend since 2012, with three increases of more than 20%. From an operating standpoint, company has maintained a healthy gross margin above 25%, low to none short term debt and stable EBITDA per share. Our projection reflects a flat payout ratio of 38%, measuring against management latest guided EPS around $3.40-$3.55. Despite minor same store sale decline, we believe company is able to keep up current growth trend from profit drivers including sale from new hardware, digital receipts and technology brands business