Important news for shareholders and potential investors in Chico’s FAS Inc (NYSE:CHS): The dividend payment of $0.09 per share will be distributed into shareholder on 02 July 2018, and the stock will begin trading ex-dividend at an earlier date, 15 June 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Chico’s FAS’s latest financial data to analyse its dividend characteristics. View our latest analysis for Chico’s FAS
5 questions I ask before picking 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?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has dividend per share amount increased 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?
How does Chico’s FAS fare?
The current trailing twelve-month payout ratio for the stock is 44.22%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider Chico’s FAS as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. In terms of its peers, Chico’s FAS generates a yield of 3.75%, which is high for Specialty Retail stocks but still below the market’s top dividend payers.
After digging a little deeper into Chico’s FAS’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three fundamental aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for CHS’s future growth? Take a look at our free research report of analyst consensus for CHS’s outlook.
- Valuation: What is CHS 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 CHS 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.