Yahoo Finance Only 4 Days Left Before The Gap Inc (NYSE:GPS) Will Be Trading Ex-Dividend,
Investors who want to cash in on The Gap Inc’s (NYSE:GPS) upcoming dividend of US$0.24 per share have only 4 days left to buy the shares before its ex-dividend date, 09 October 2018, in time for dividends payable on the 31 October 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Gap’s latest financial data to analyse its dividend characteristics.
Check out our latest analysis for Gap
What Is A Dividend Rock Star?
It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. More specifically:
Its annual yield is among the top 25% of dividend payers
It consistently pays out dividend without missing a payment or significantly cutting payout
Its dividend per share amount has increased over the past
It is able to pay the current rate of dividends from its earnings
It is able to continue to payout at the current rate in the future
High Yield And Dependable
Gap’s yield sits at 3.5%, which is high for Specialty Retail stocks. But the real reason Gap stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. GPS has increased its DPS from $0.34 to $0.97 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
The current trailing twelve-month payout ratio for the stock is 41%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 38%, leading to a dividend yield of 3.6%. In addition to this, EPS should increase to $2.65.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
Next Steps:
With Gap producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a top dividend generator moving forward. However, given this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three pertinent aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for GPS’s future growth? Take a look at our free research report of analyst consensus for GPS’s outlook.
Valuation: What is GPS worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether GPS is currently mispriced by the market.
Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
