Our analysis is based on comparing SpartanNash Co. with the following peers – United Natural Foods, Inc., SUPERVALU INC., Core-Mark Holding Company, Inc., Weis Markets, Inc., Chefs’ Warehouse, Inc., Sysco Corporation, G. Willi-Food International Ltd, AMCON Distributing Company and Village Super Market, Inc. Class A (UNFI-US, SVU-US, CORE-US, WMK-US, CHEF-US, SYY-US, WILC-US, DIT-US and VLGEA-US).
SpartanNash Co.’s dividend yield is 2.53 percent and its dividend payout is -31.93 percent. This compares to a peer median dividend yield of 2.32 percent and a payout level of 42.48 percent. This relatively higher dividend yield and lower payout ratio makes the company a good candidate for dividend investors looking at this peer group. The downside is the company’s relatively low dividend quality score of 33 out of a possible score of 100.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2017), SPTN-US paid a medium quality dividend, which represents a yield of 2.47% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 4 were high quality and 1 was low quality.
- The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.
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Over the last twelve months (prior to September 30, 2017), SPTN-US paid a medium 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 6.08x), investing cash flow (coverage of -12.08x), issuance cash flow (coverage of 6.46x) and twelve-month prior cash (coverage of 1.09x), for a total dividend coverage of 1.54x.
SPTN-US’s issuance cash flow includes outflows from net share buybacks (coverage of -0.73x). Thus, the total coverage including share buybacks is 2.28x, 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 net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.
|Dividend Yield (%)||1.47||0.67||1.87||2.49||1.52||2.53|
|Dividend Payout (%)||21.94||870.65||30.97||32.53||39.74||-31.93|
A complete list of metrics and analysis is available on the company page.
SpartanNash Co. engages in the distribution of grocery products to military commissaries in the U.S. It operates its business through the following segments: Military, Food Distribution, and Retail. The Military segment sells and distributes grocery products primarily to U.S. military commissaries and exchanges. The Food Distribution segment distributes groceries to independent and corporate owned grocery retailers using multi-platform sales approach. The Retail segment operates retail supermarkets in the Midwest, which operate under banners of Family Fare Supermarkets, No Frills, Bag ‘N Save, Family Fresh Markets, D&W Fresh Markets, Sun Mart and Econo Foods. The company was founded on November 19, 2013 and is headquartered in Grand Rapids, MI.
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