Our analysis is based on comparing Foot Locker, Inc. with the following peers – Genesco Inc., Finish Line, Inc. Class A, DSW Inc. Class A, Shoe Carnival, Inc., NIKE, Inc. Class B, Caleres, Inc. and Belle International Holdings Limited Unsponsored ADR (GCO-US, FINL-US, DSW-US, SCVL-US, NKE-US, CAL-US and BELLY-US).
Dividend Quality Overview
- Over the last twelve months (prior to January 31, 2017), FL-US paid a high quality dividend, which represents a yield of 1.53% 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 7.14x, 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 January 31, 2017), FL-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 5.55x), investing cash flow (coverage of -1.81x), issuance cash flow (coverage of -2.60x) and twelve-month prior cash (coverage of 6.97x), for a total dividend coverage of 8.14x.
FL-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -0.02x) and net share buybacks (coverage of -2.71x). Thus, the total coverage including share buybacks is 10.85x, 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 (%)||2.1||2.1||1.69||1.5||1.64||1.57|
|Dividend Payout (%)||27.91||28.07||24.72||26.04||22.4||22.4|
A complete list of metrics and analysis is available on the company page.
Foot Locker, Inc. engages in the global retail of athletically inspired shoes and apparel. It operates through the following segments: Athletic Stores and Direct-to-Customers. The Athletic Stores segment operates athletic footwear and apparel retailers in the world, with brands that include Foot Locker, Lady Foot Locker, SIX:02, Kids Foot Locker, Champs Sports, Footaction, Runners Point and Sidestep. The Direct-to-Customers segment includes Footlocker.com, Inc. and other affiliates, including Eastbay, Inc., and company’s international ecommerce businesses, which sell to customers through their Internet and mobile sites and catalogs. The company was founded in 1989 and is headquartered in New York, NY.
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