Our analysis is based on comparing Dunkin’ Brands Group, Inc. with the following peers – Wendy’s Company, McDonald’s Corporation, Starbucks Corporation, J. M. Smucker Company and Dean Foods Company (WEN-US, MCD-US, SBUX-US, SJM-US and DF-US).
Dunkin’ Brands Group, Inc.’s dividend yield is 2.29 percent and its dividend payout is 55.35 percent. This compares to a peer median dividend yield of 2.26 percent and a payout level of 58.58 percent. This relatively higher dividend yield and lower payout ratio makes the company a good candidate for dividend investors looking seeking good current dividend income within this peer group. In addition, the company’s relatively good dividend quality score of 83 out of a possible score of 100, underscores its attractiveness for dividend investors.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2017), DNKN-US paid a high quality dividend, which represents a yield of 2.25% at the current price.
- Dividends paid during each of the last five years were consistently of high quality.
- The ending cash balance, with a dividend coverage of 2.98x, 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 September 30, 2017), 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 2.31x), investing cash flow (coverage of -0.10x), issuance cash flow (coverage of -1.19x) and twelve-month prior cash (coverage of 2.96x), for a total dividend coverage of 3.98x.
DNKN-US’s issuance cash flow includes outflows from net debt repayment (coverage of -0.22x) and net share buybacks (coverage of -0.98x). Thus, the total coverage including share buybacks is 4.96x, 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 (%)||2.04||1.59||2.18||2.56||2.29||2.29|
|Dividend Payout (%)||64.52||55.88||55.76||98.15||56.87||55.35|
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, which engages in the service of hot and cold coffee, baked goods, and ice cream. It operates through the following segments: Dunkin’ Donuts U.S., Dunkin’ Donuts International, Baskin-Robbins International, and Baskin-Robbins U.S. The company was founded on November 22, 2005 and is headquartered in Canton, MA.
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