Assessing the Upcoming Dividend and Historical Payouts
Bath & Body Works Inc (BBWI, Financial) recently announced a dividend of $0.20 per share, payable on March 8, 2024, with the ex-dividend date set for February 22, 2024. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Utilizing data from GuruFocus, we will delve into Bath & Body Works Inc's dividend performance and evaluate its sustainability.
What Does Bath & Body Works Inc Do?
Bath & Body Works is a renowned retailer specializing in home fragrances and fragrant body care, operating under the Bath & Body Works, C.O. Bigelow, and White Barn brands. The company predominantly serves the North American market, with international sales comprising less than 5% of its fiscal 2022 revenue. With a strong brick-and-mortar presence through more than 1,800 retail stores, Bath & Body Works Inc generated 72% of its sales from physical locations in fiscal 2022. The brand is poised for future growth through strategies such as store reformatting, digital expansion, international channel development, and exploring adjacent product categories.
A Glimpse at Bath & Body Works Inc's Dividend History
Bath & Body Works Inc has upheld a steadfast record of dividend payments since 1986, signifying a long-standing commitment to returning value to shareholders. The company distributes dividends on a quarterly basis, offering investors a regular income stream.
Below is a chart illustrating the historical trends of Bath & Body Works Inc's annual Dividends Per Share.
Breaking Down Bath & Body Works Inc's Dividend Yield and Growth
Bath & Body Works Inc currently boasts a 12-month trailing dividend yield of 1.69% and mirrors this with a forward dividend yield of 1.69%, indicating a stable dividend outlook for the coming year.
Over the past three years, the company's annual dividend growth rate has been -12.60%. This trend extends to a five-year decline of -28.80% per annum. On a decade-long scale, Bath & Body Works Inc's dividends per share have seen an annual growth rate of -9.20%. These figures suggest a challenging environment for dividend growth, with the 5-year yield on cost for Bath & Body Works Inc stock currently standing at approximately 0.31%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of Bath & Body Works Inc's dividend is often gauged by its dividend payout ratio. As of October 31, 2023, the payout ratio stands at 0.26, indicating a conservative approach to dividend distribution, which could bode well for future financial flexibility and resilience to economic downturns.
Bath & Body Works Inc's profitability rank is a robust 8 out of 10, reflecting strong earning potential in comparison to industry peers. The company's consistent profitability, with net profit reported in 9 of the past 10 years, underpins its dividend reliability.
Growth Metrics: The Future Outlook
The company's growth rank of 8 out of 10 is indicative of a favorable growth trajectory when compared to its competitors. This is supported by an impressive revenue per share and a 3-year revenue growth rate of 18.60% per annum, outperforming 80.19% of global rivals.
Bath & Body Works Inc's 3-year EPS growth rate of 22.30% per annum, outperforming 65.45% of global competitors, speaks to its earnings growth capabilities. Furthermore, the company's 5-year EBITDA growth rate of 6.90% surpasses 45.97% of global peers, reinforcing its growth potential.
Engaging Conclusion
In conclusion, while Bath & Body Works Inc's dividend growth rates have faced headwinds in recent years, the company's strong payout ratio, profitability, and growth metrics provide a solid foundation for future dividend sustainability. Investors should consider these factors when evaluating the stock's potential as a long-term income investment. For those seeking additional high-dividend yield opportunities, GuruFocus Premium offers a comprehensive High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
