Interested In The Kroger Co (NYSE:KR)’s Upcoming US$0.14 Dividend? You Have 4 Days Left
If you are interested in cashing in on The Kroger Co’s (NYSE:KR) upcoming dividend of US$0.14 per share, you only have 4 days left to buy the shares before its ex-dividend date, 14 November 2018, in time for dividends payable on the 01 December 2018. Is this future income a persuasive enough catalyst for investors to think about Kroger as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
View our latest analysis for Kroger
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
Is it paying an annual yield above 75% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has dividend per share amount increased over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
Does Kroger pass our checks?
The company currently pays out 12% 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 a higher payout ratio of 25%, leading to a dividend yield of 1.8%. However, EPS is forecasted to fall to $3.11 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
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 KR it has increased its DPS from $0.18 to $0.56 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.
Relative to peers, Kroger produces a yield of 1.8%, which is on the low-side for Consumer Retailing stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank Kroger as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. 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. There are three important aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for KR’s future growth? Take a look at our free research report of analyst consensus for KR’s outlook.
Valuation: What is KR 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 KR 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
