NASDAQ:SPTN) is about to go ex-dividend in the next four days. Investors can purchase shares before the 10th of September in order to be eligible for this dividend, which will be paid on the 30th of September.” data-reactid=”28″>It looks like SpartanNash Company (NASDAQ:SPTN) is about to go ex-dividend in the next four days. Investors can purchase shares before the 10th of September in order to be eligible for this dividend, which will be paid on the 30th of September.
SpartanNash’s next dividend payment will be US$0.19 per share, on the back of last year when the company paid a total of US$0.77 to shareholders. Based on the last year’s worth of payments, SpartanNash stock has a trailing yield of around 4.2% on the current share price of $18.37. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That’s why we should always check whether the dividend payments appear sustainable, and if the company is growing.
View our latest analysis for SpartanNash ” data-reactid=”30″> View our latest analysis for SpartanNash
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. SpartanNash paid out more than half (56%) of its earnings last year, which is a regular payout ratio for most companies. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. The good news is it paid out just 14% of its free cash flow in the last year.
It’s encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don’t drop precipitously.
here to see the company’s payout ratio, plus analyst estimates of its future dividends.” data-reactid=”37″>Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. So we’re not too excited that SpartanNash’s earnings are down 2.9% a year over the past five years.
Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, SpartanNash has lifted its dividend by approximately 14% a year on average. That’s interesting, but the combination of a growing dividend despite declining earnings can typically only be achieved by paying out more of the company’s profits. This can be valuable for shareholders, but it can’t go on forever.
Final Takeaway
Is SpartanNash an attractive dividend stock, or better left on the shelf? The payout ratios are within a reasonable range, implying the dividend may be sustainable. Declining earnings are a serious concern, however, and could pose a threat to the dividend in future. Overall, it’s not a bad combination, but we feel that there are likely more attractive dividend prospects out there.
3 warning signs we think you should be aware of.” data-reactid=”55″>However if you’re still interested in SpartanNash as a potential investment, you should definitely consider some of the risks involved with SpartanNash. For example – SpartanNash has 3 warning signs we think you should be aware of.
a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.” data-reactid=”56″>A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”57″>This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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