Is Brinker International Inc (NYSE:EAT) A Smart Choice For Dividend Investors?
Brinker International Inc (NYSE:EAT) has pleased shareholders over the past 10 years, paying out an average dividend of 3.00% annually. The stock currently pays out a dividend yield of 3.47%, and has a market cap of US$1.91B. Should it have a place in your portfolio? Let’s take a look at Brinker International in more detail. View our latest analysis for Brinker International
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Does it pay an annual yield higher than 75% of dividend payers?
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?
Can it afford to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Brinker International fare?
Brinker International has a trailing twelve-month payout ratio of 52.70%, which means that the dividend is covered by earnings. However, going forward, analysts expect EAT’s payout to fall to 43.69% of its earnings, which leads to a dividend yield of around 3.61%. However, EPS should increase to $3.55, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. EAT has increased its DPS from $0.44 to $1.52 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Relative to peers, Brinker International produces a yield of 3.47%, which is high for Hospitality stocks but still below the market’s top dividend payers.
Next Steps:
Keeping in mind the dividend characteristics above, Brinker International is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three important aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for EAT’s future growth? Take a look at our free research report of analyst consensus for EAT’s outlook.
Valuation: What is EAT 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 EAT 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 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.
