Is Bloomin’ Brands Inc (NASDAQ:BLMN) A Smart Pick For Income Investors?
Dividends play an important role in compounding returns in the long run and end up forming a sizeable part of investment returns. Bloomin’ Brands Inc (NASDAQ:BLMN) has returned to shareholders over the past 3 years, an average dividend yield of 1.00% annually. Does Bloomin’ Brands tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. View our latest analysis for Bloomin’ Brands
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is their annual yield among the top 25% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has the amount of dividend per share grown over the past?
Does earnings amply cover its dividend payments?
Will it be able to continue to payout at the current rate in the future?
Does Bloomin’ Brands pass our checks?
The company currently pays out 30.76% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 27.43%, leading to a dividend yield of 1.64%. However, EPS should increase to $1.39, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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. Unfortunately, it is really too early to view Bloomin’ Brands as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Compared to its peers, Bloomin’ Brands produces a yield of 1.53%, which is on the low-side for Hospitality stocks.
Next Steps:
Whilst there are few things you may like about Bloomin’ Brands from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. I’ve put together three pertinent aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for BLMN’s future growth? Take a look at our free research report of analyst consensus for BLMN’s outlook.
Valuation: What is BLMN 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 BLMN is currently mispriced by the market.
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.
