Is Buying Brinker International Inc (NYSE:EAT) For Its Upcoming $0.38 Dividend A Good Choice?
If you are interested in cashing in on Brinker International Inc’s (NYSE:EAT) upcoming dividend of $0.38 per share, you only have 6 days left to buy the shares before its ex-dividend date, 08 March 2018, in time for dividends payable on the 29 March 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Brinker International can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for Brinker International
What Is A Dividend Rock Star?
It is a stock that pays a stable and consistent dividend, having done so reliably for the past decade with the expectation of this continuing into the future. More specifically: It is paying an annual yield above 75% of dividend payers It consistently pays out dividend without missing a payment or significantly cutting payout Its dividend per share amount has increased over the past It is able to pay the current rate of dividends from its earnings It has the ability to keep paying its dividends going forward
High Yield And Dependable
Brinker International currently yields 4.44%, which is high for Hospitality stocks. But the real reason Brinker International stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you’re investor who wants a robust cash inflow from your portfolio over a long period of time.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. In the case of EAT it 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. The current trailing twelve-month payout ratio for the stock is 54.09%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 44.73%, leading to a dividend yield of 4.68%. However, EPS should increase to $3.37, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
Next Steps:
Brinker International ticks all the boxes for what I look for in a dividend stock. If you are looking to build an income focused portfolio, this could be one to include. However, given 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. Below, I’ve compiled three important aspects you should look at:
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 strong dividend payers with better 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.
