Our analysis is based on comparing TESSCO Technologies, Inc. with the following peers – Richardson Electronics, Ltd., ADDvantage Technologies Group, Inc., Avnet, Inc., Arrow Electronics, Inc., Systemax Inc., SYNNEX Corporation and Tech Data Corporation (RELL-US, AEY-US, AVT-US, ARW-US, SYX-US, SNX-US and TECD-US).
TESSCO Technologies, Inc.’s dividend yield is 5.32 percent and its dividend payout is 235.29 percent. This compares to a peer median dividend yield of 1.38 percent and a payout level of 13.57 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s relatively low dividend quality score of 25 out of a possible score of 100 raises questions on the sustainability of its robust payout ratio.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2017), TESS-US paid a low quality dividend, which represents a yield of 5.32% 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 3 were high quality and 2 were 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.
Quadrant label definitions. Hover to know more
Over the last twelve months (prior to September 30, 2017), TESS-US paid a low 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 -2.13x), investing cash flow (coverage of -0.42x), issuance cash flow (coverage of 1.99x) and twelve-month prior cash (coverage of 1.61x), for a total dividend coverage of 1.04x.
These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.
|Dividend Yield (%)||6.84||2.12||3.2||4.66||5.32||5.32|
|Dividend Payout (%)||33.49||38.14||76.92||123.08||470.59||235.29|
A complete list of metrics and analysis is available on the company page.
TESSCO Technologies, Inc. supplies wireless communications products for network infrastructure, site support, fixed and mobile broadband networks. It offers products such as station infrastructure, network systems, mobile devices and accessories, and installation, test and maintenance products. The company offers supply-chain solutions required to use and resell wireless voice, data and video systems. TESSCO Technologies was founded by Robert B. Barnhill Jr. in 1982 and is headquartered in Hunt Valley, MD.
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