Our analysis is based on comparing Big Lots, Inc. with the following peers – Dollar General Corporation, Dollar Tree, Inc., Fred’s, Inc. Class A, Target Corporation, Costco Wholesale Corporation and Five Below, Inc. (DG-US, DLTR-US, FRED-US, TGT-US, COST-US and FIVE-US).
Big Lots, Inc.’s dividend yield is 2.29 percent and its dividend payout is 23.98 percent. This compares to a peer median dividend yield of 2.18 percent and a payout level of 23.39 percent. This type of dividend performance might make it a good stock for dividend investors. In addition, the company’s relatively good dividend quality score of 75 out of a possible score of 100 points to some sustainability of its robust payout ratio, and underscores its attractiveness for dividend investors seeking current income.
Dividend Quality Overview
- Over the last twelve months (prior to April 30, 2017), BIG-US paid a high quality dividend, which represents a yield of 1.79% at the current price.
- Dividends were paid for 3 of the last five years — all of them were also of high quality.
- The ending cash balance, with a dividend coverage of 1.62x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to April 30, 2017), BIG-US paid a high quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 7.86x), investing cash flow (coverage of -2.17x), issuance cash flow (coverage of -4.66x) and twelve-month prior cash (coverage of 1.59x), for a total dividend coverage of 2.62x.
BIG-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -1.04x) and net share buybacks (coverage of -3.63x). Thus, the total coverage including share buybacks is 6.25x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||0||0||1.15||2.02||1.79||2.29|
|Dividend Payout (%)||0||0||24.76||27.14||25.3||23.98|
A complete list of metrics and analysis is available on the company page.
Big Lots, Inc. operates broad line closeout retail stores. It operates under following merchandise categories which include Food, Consumables, Soft Home, Hard Home, Furniture, Seasonal, and Electronics & Accessories. The Food category includes beverage & grocery, candy and snacks, and specialty food departments. The Consumables category comprises health and beauty, plastics, paper, chemical, and pet departments. The Soft Home category includes home dÃ©cor, frames, fashion bedding, utility bedding, bath, window, decorative textile, and area rugs departments. The Hard Home category consists of small appliances, table top, food preparation, stationery, greeting cards, tools, paint, and home maintenance departments. The Furniture category includes upholstery, mattress, ready-to-assemble, case goods, home decor, and frames departments. The Seasonal category maintains lawn and garden, summer, Christmas, toys, books, sporting goods, and other holiday departments. The Electronics & Accessories category includes the electronics, jewelry, apparel, hosiery, and infant accessories departments. The company was founded by Sol A. Shenk in 1967 and is headquartered in Columbus, OH.
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