Unpacking The Aarons Co Inc's Dividend Performance: A Comprehensive Analysis
Exploring the Sustainability and Growth Potential of The Aarons Co Inc's Dividends
The Aarons Co Inc (NYSE:AAN) recently announced a dividend of $0.13 per share, payable on 2023-10-04, with the ex-dividend date set for 2023-09-13. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into The Aarons Co Inc's dividend performance and assess its sustainability.
Understanding The Aarons Co Inc's Business Model
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The Aarons Co Inc is a specialty retailer which has developed a unique lease-to-own model. It serves the customers through the sale and lease ownership of furniture, consumer electronics, computers, home appliances, and other accessories at the best deal with the highest quality products. Aaron's services are available through multiple channels to approximately 40-50 % of the U.S. population. The Company conducts its operations through two primary operating business segments: Aaron's Business and BrandsMart.
Delving into The Aarons Co Inc's Dividend History
The Aarons Co Inc has maintained a consistent dividend payment record since 2021. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Assessing The Aarons Co Inc's Dividend Yield and Growth
As of today, The Aarons Co Inc currently has a 12-month trailing dividend yield of 4.66% and a 12-month forward dividend yield of 4.91%. This suggests an expectation of increased dividend payments over the next 12 months. Based on The Aarons Co Inc's dividend yield and five-year growth rate, the 5-year yield on cost of The Aarons Co Inc stock as of today is approximately 4.66%.
Is The Aarons Co Inc's Dividend Sustainable? Examining the Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, The Aarons Co Inc's dividend payout ratio is 0.00. The Aarons Co Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks The Aarons Co Inc's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 4 years out of past 10 years.
Gauging The Aarons Co Inc's Growth Prospects
To ensure the sustainability of dividends, a company must have robust growth metrics. The Aarons Co Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and The Aarons Co Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. The Aarons Co Inc's revenue has increased by approximately 11.30% per year on average, a rate that outperforms approximately 70.8% of global competitors.
Final Thoughts
The Aarons Co Inc's consistent dividend payments, impressive growth rate, and sustainable payout ratio make it an attractive choice for investors seeking steady income. With its solid profitability and robust growth metrics, the company appears well-positioned to maintain its dividend performance in the foreseeable future. However, like any investment, it's crucial to conduct your due diligence and consider your financial goals before making a decision. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
