Unveiling the Dividend Prospects of The Kroger Co
The Kroger Co (KR, Financial) recently announced a dividend of $0.29 per share, payable on 2024-03-01, with the ex-dividend date set for 2024-02-14. 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 The Kroger Co's dividend performance and assess its sustainability.
What Does The Kroger Co Do?
Kroger is the leading U.S. grocer, with 2,719 supermarkets operating under several banners throughout the country at the end of fiscal 2022. Around 83% of stores have pharmacies, while nearly 60% also sell fuel. The company also operates roughly 120 fine jewelry stores. Kroger features a leading private-label offering and manufactures around 30% of its own-brand units (and more than 40% of its grocery own-label assortment) itself in 33 food production plants nationwide. Kroger is a top-two grocer in most of its major markets (as of early 2021, according to company data). Virtually all of Kroger's sales come from the United States. Kroger has offered to acquire Albertsons in a $25 billion deal; if the transaction is approved by regulators, it should close in 2024.
A Glimpse at The Kroger Co's Dividend History
The Kroger Co has maintained a consistent dividend payment record since 2006, with distributions occurring quarterly. The company has not only been consistent but has also shown a commitment to growth, increasing its dividend annually since 2007. This achievement has earned The Kroger Co the status of a dividend achiever, a prestigious recognition for companies with at least 17 consecutive years of dividend increases.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down The Kroger Co's Dividend Yield and Growth
The Kroger Co currently boasts a 12-month trailing dividend yield of 2.40% and a forward dividend yield of 2.54%, indicating an anticipated increase in dividend payments over the next year. Over the past three years, the company's annual dividend growth rate was an impressive 16.10%. This growth rate moderates slightly over a five-year span to 13.90% per year, and over the past decade, The Kroger Co has maintained a solid annual growth rate of 13.00%.
When considering The Kroger Co's dividend yield and five-year growth rate, the 5-year yield on cost for The Kroger Co stock is approximately 4.60%.
The Sustainability Question: Payout Ratio and Profitability
Assessing the sustainability of The Kroger Co's dividend involves examining the dividend payout ratio, which currently stands at 0.24 as of 2023-10-31. This ratio, which measures the proportion of earnings paid out as dividends, suggests that The Kroger Co retains a healthy portion of its earnings for future growth and stability.
The company's profitability rank, which is a robust 9 out of 10, indicates strong earnings potential relative to its peers. The Kroger Co's consistent positive net income over the past decade further reinforces its profitability.
Growth Metrics: The Future Outlook
The Kroger Co's growth rank of 9 out of 10 highlights a promising growth trajectory. Its revenue per share and 3-year revenue growth rate of 10.30% per year surpass approximately 69.44% of global competitors, signaling a robust revenue model.
The company's 3-year EPS growth rate of 24.50% per year outperforms approximately 67.89% of global competitors, indicating strong earnings growth. Additionally, The Kroger Co's 5-year EBITDA growth rate of 17.40% outpaces about 71.1% of global competitors.
Next Steps
Considering The Kroger Co's consistent dividend payments, impressive dividend growth rate, moderate payout ratio, strong profitability, and robust growth metrics, the company's dividend prospects appear favorable. Investors seeking high-dividend yield stocks can utilize the High Dividend Yield Screener available to GuruFocus Premium users to discover similar investment opportunities. Will The Kroger Co maintain its dividend achiever status and continue to provide value to its shareholders? Only time will tell, but the indicators suggest a positive outlook for the company's dividend future.
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.
