Dissecting the Dividend Profile of BAB Inc (BABB, Financial)
BAB Inc(BABB) recently announced a dividend of $0.01 per share, payable on 2024-01-16, with the ex-dividend date set for 2023-12-26. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into BAB Inc's dividend performance and assess its sustainability.
What Does BAB Inc Do?
BAB Inc franchises and licenses bagel and muffin retail units under the Big Apple Bagels, My Favorite Muffin, and SweetDuet trade names. The company also sells its trademark bagels, muffins, and coffee through nontraditional channels of distribution, including under licensing agreements with Kohr Bros. Frozen Custard and Green Beans Coffee. It operates approximately 68 franchise units and 4 licensed units across 20 states in the United States and one international location.
A Glimpse at BAB Inc's Dividend History
BAB Inc has maintained a consistent dividend payment record since 2004, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down BAB Inc's Dividend Yield and Growth
As of today, BAB Inc currently has a 12-month trailing dividend yield of 5.48% and a 12-month forward dividend yield of 5.48%, suggesting an expectation of the same dividend payments over the next 12 months. Over a five-year horizon, this rate decreased to -2.00% per year, and over the past decade, BAB Inc's annual dividends per share growth rate stands at -0.80%. The 5-year yield on cost of BAB Inc stock as of today is approximately 4.95%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of 2023-08-31, BAB Inc's dividend payout ratio is 0.57, indicating a balanced approach to dividend distribution and earnings retention. BAB Inc's profitability rank, as of the same date, is an impressive 8 out of 10, suggesting good profitability prospects and consistent net profit in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
The sustainability of dividends is also contingent on a company's growth metrics. BAB Inc's growth rank of 8 out of 10 indicates a promising growth trajectory. Furthermore, BAB Inc's revenue per share and 3-year revenue growth rate reflect a strong revenue model, with an average annual increase of approximately 2.30%, albeit underperforming approximately 66.18% of global competitors.
Concluding Insights on BAB Inc's Dividend Fortitude
Considering BAB Inc's consistent dividend payments, reasonable payout ratio, and robust profitability and growth metrics, the company presents a compelling case for dividend investors. While the dividend growth rate and revenue growth may not be stellar, the high yield and stability of payments could be attractive for those seeking regular income. Investors are encouraged to consider these factors in the context of their individual investment strategies and risk tolerance. For further research and screening of high-dividend yield stocks, GuruFocus Premium users can utilize the 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.
