Dividend Growth Rate In Costco

Better Essays
Dividends, dividend growth rate and percentage yield are all important factors when evaluating a firm’s worth and the value associated with investing in the company. While dividends are an integral part of this examination, it is important to remember that dividends alone do not determine the health of a firm. Each publically traded company has their own unique dividend policy that may or may not attract a certain type of investor. Dividend Ex-1

Costco is the outlier of the three firms and has paid out either no, or very minimal dividends to its investors. However, this does not mean that Costco is an unhealthy firm. They are simply equipping the clientele effect and targeting a certain type of investor. Their target investor does not need
…show more content…
As seen above (Dividend Ex-2), the average for Walmart from 2012-2016 has been 6.55%. This appears fairly high, but there are also other factors at bay. For obvious reasons, dividend growth rate is only healthy if it outweighs inflation rate and the industry’s average growth rate. So, in order to ensure the health of this rate, we must compare it to those two factors as well. Dividend Ex-3 As seen above (Dividend Ex-3), this global retail industry has shrunk in dividends from 2012 to 2016 by 2.91%. Seeing as average inflation over these 5 years has been 1.29%, the industry is not keeping up with its dividend payments (or perhaps is switching to a different payout policy). While this is the case, Walmart seems to be the outlier with an average dividend growth rate of 6.55%. So, for an investor trying to find a stock with growing dividends, Walmart seems to be a viable option. The dividend policy of Kroger is fairly similar to Walmart. They favor paying out portions of net income in the form of dividend payout in order to attract a certain type of investor. All of the characteristics of Walmart investors will be very similar to Kroger investors. The investors will favor the current income over the tax break and reinvestment into the company through retained earnings. They will also use the dividend as a means for uncertainty …show more content…
The North American average for the industry started high at 1.50% in 2012, dipped to a low of .98% in 2014, and has trended up since 2014. Kroger has followed a similar trajectory, but continued its dip until 2015 in which yield dropped to a low of .9%. In one year, it has bounced back to a high of 1.50%. While Kroger follows nearly the same flow as the national average, it’s also obvious that Kroger’s yield has a higher rate of variance. Its highs are higher, as are its lows. This stock would be slightly riskier because of its variance. However, Kroger has been above the national average and would be a viable option for a dividend seeking investor. While it is a top contender in the North American food retail industry, its 1.34% average yield is no match for Walmart’s

Related Documents

  • Decent Essays

    Viacom Growth Strategy

    • 761 Words
    • 4 Pages

    The peak of the company’s revenue was seen five years ago, as the they have been seeing a steady decrease since 2011. For comparison, in 2011 Viacom’s revenue came in at $14.91 billion, while their 2015 revenue was a staggering 1.13 billion lower, coming in at $13.78 billion (marketwatch). The same is true for their cost of goods sold, or cogs, as it totaled just over $7 billion in…

    • 761 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Tesco's Financial Summary

    • 1142 Words
    • 5 Pages

    Tesco see the biggest reduction – with decreasing Trade Payables and a significant reduction in short term borrowings between 2012 and 2013. Tesco’s Non-Current Liabilities have decreased by £535 million from 2009–2013. This supports comments in the Tesco’s 2013 financial report in which the financial director highlighted his aim to reduce net debt significantly over the medium term. However closer inspection shows a rising trend from a low in 2011. Sainsbury’s Non-Current Liabilities on the other hand shows a relatively steady but manageable increase.…

    • 1142 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Wal-Mart has a larger net worth and market cap than any of its competitors. There net profit margin ratio is good however is not performing than it should. The problem is that they price it too low. Wal-Mart can raise prices to prove this ratio; however, their volume of business makes up for this. Their ROI on its assets as well as their ROE is consistent unlike its competition.…

    • 1883 Words
    • 8 Pages
    Decent Essays
  • Decent Essays

    BASF - Ratio Analysis i. Profitability Ratios To begin with, we analyzed the most fundamental category of ratios, which are the profitability ratios. The first two profitability ratios, “Return on ordinary shareholders funds/ (ROSF)”, and “Return on capital employed/ (ROCE)” are almost stable for BASF from 2012 till 2014, while in 2015 they both drastically fall for an average of 4 points, till 2016. These two ratios indicate a gradual decrease in net profits, because of a decrease in sales and an increase of operational expenses. Respectively, the ratios for Sika retain a similar stability for the years 2015 and 2016, whereas in Sto the profitability between these two years shows a noteworthy decrease.…

    • 1620 Words
    • 7 Pages
    Decent Essays
  • Decent Essays

    OECD COMPOSITE LEADING INDICATORS (CLI) The OECD system of Composite Leading Indicators is designed to provide early signals of turning points in business cycles - fluctuation in the output gap, i.e. fluctuation of the economic activity around its long-term potential level. Although these charts are from 2014-2015 they continued to follow the same pattern leaving the United States in the same position as China, Europe, and the rest of the world. VII. CHINA INDUSTRIAL PRODUCTION Industrial production in China rose 5.90 percent year-on-year in December of 2015, slowing from a 6.20 percent increase in the previous month and missing market expectations of 6.0 percent growth.…

    • 935 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Whole Foods has faced a significant decline in price in the past 18 months due to cannibalization effects from their rapid expansion of new stores and increased competition in the natural and organic food industry. Apple has seen modest gains (7.67%) in the past year and a half but they have been significantly less than in years past. Citi has performed…

    • 905 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Starbucks long-term return on assets (ROA) deteriorated from 2012 to 2013 from 17.76% to 0.08%, but improved remarkably in 2013 to 2014 from 0.08% to 18.57%. Over the last ten years, Starbucks Corporation had the highest return on assets of 18.57 % in 2014 and the lowest return on assets of 0.08% in 2013 with a median of 10.86%. Starbucks cost of financing (debt) was around 5% suggesting that the company has favorable financing by almost 14% in 2014. Starbucks return of assets was greater than 5% (cost of debt) with only one unfavorable year for financing in 2013 probably due to the impending lawsuit. By the end of 2013, Starbucks had total assets of $11,517 million and total liabilities of $7037 million produced a debt-to-asset ratio of…

    • 839 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    The aspects this report will analyze from the income statement of Estee Lauder are; earnings per share, gross profit rate and the profit margin. Earnings per share is calculated by dividing net income minus preferred dividends by the average number of common shares outstanding during the year. EPS for Estee Lauder are $2.87 in 2015, $3.12 in 2014, and $2.64 in 2013. From 2014 to 2015, Estee Lauder’s earnings per share decreased, which seems bad, but through further research, the reason for this decrease was Estee Lauder acquired four brands: RODIN olio lusso, Le Labo, Editions de Parfums Frédéric Malle, and GLAMGLOW. The decrease in EPS because of acquisitions is normal and it can be expected that Estee Lauder’s EPS will increase in the future.…

    • 1533 Words
    • 6 Pages
    Decent Essays
  • Decent Essays

    National Oilwell Varco: Buy the Drop Oil and gas equipment services provider National Oilwell Varco (NOV) has declined to its 52-week lows after losing half of its value on the stock market this year. Now, while it is a given that companies related to the oil patch will see weakness in their stock price, I think that the market has been too harsh on National Oilwell. This is because despite the end-market challenges, the company has managed to beat bottom-line estimates in each of the last four quarters. A weak rig count has weighed on its results National Oilwell’s top line has been under pressure due to a declining rig count in the U.S. and abroad. According to data from Baker Hughes (BHI), the U.S. drilling rig count has fallen 114 units…

    • 854 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    As we can see, Wal-Mart’s share actually decreases 10% to 11.5% in 2012. That is also down from its peak of a 12.2% share in 2009 that calculate a great run from an 8.6% share in 2001, up about 50% in 8 years. 2.Why success in US Large buying power Wal-Mart is providing its customers with low prices. Wal-Mart is able to provide low prices as it has large buying power. Excellent Operation The main spirit of excellent operation is high expectations.…

    • 1236 Words
    • 5 Pages
    Decent Essays

Related Topics