Our analysis is based on comparing Dunkin’ Brands Group, Inc. with the following peers – Wendy’s Company, Panera Bread Company Class A, McDonald’s Corporation, Starbucks Corporation, Dean Foods Company and J. M. Smucker Company (WEN-US, PNRA-US, MCD-US, SBUX-US, DF-US and SJM-US).
Dunkin’ Brands Group, Inc.’s dividend yield is 2.36 percent and its dividend payout is 82.62 percent. This compares to a peer median dividend yield of 1.82 percent and a payout level of 42.11 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 92 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 September 30, 2016), DNKN-US paid a high quality dividend, which represents a yield of 2.29% at the current price.
- Dividends were paid for 4 of the last five years — all of them were also of high quality.
- The ending cash balance, with a dividend coverage of 3.19x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to September 30, 2016), DNKN-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 2.17x), investing cash flow (coverage of -0.06x), issuance cash flow (coverage of -1.63x) and twelve-month prior cash (coverage of 4.07x), for a total dividend coverage of 4.19x.
DNKN-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -0.23x) and net share buybacks (coverage of -1.40x). Thus, the total coverage including share buybacks is 5.60x, 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||2.04||1.59||2.18||2.56||2.36|
|Dividend Payout (%)||0||64.52||55.88||55.76||98.15||82.62|
A complete list of metrics and analysis is available on the company page.
Dunkin Brands Group, Inc. operates as a franchisor of quick service restaurants, serving hot and cold coffee and baked goods, as well as hard serve ice cream. It operates through four segments: Dunkin’ Donuts U.S., Dunkin’ Donuts International, Baskin-Robbins International and Baskin-Robbins U.S. The company operates franchise restaurants under Dunkin’ Donuts and Baskin-Robbins brands. The Baskin-Robbins brand include hard-serve ice cream, soft serve ice cream, frozen yogurt, shakes, malts and floats. The Dunkin’ Donuts brand includes coffee, donuts, muffins, bagels and breakfast sandwiches. Dunkin Brands Group was founded on November 22, 2005 and is headquartered in Canton, MA.
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