Big 5 Sporting Goods Corporation (NASDAQ:BGFV): Ex-Dividend Is In 3 Days, Should You Buy?

Investors who want to cash in on Big 5 Sporting Goods Corporation’s (NASDAQ:BGFV) upcoming dividend of $0.15 per share have only 3 days left to buy the shares before its ex-dividend date, 31 May 2018, in time for dividends payable on the 15 June 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Big 5 Sporting Goods’s most recent financial data to examine its dividend characteristics in more detail. Check out our latest analysis for Big 5 Sporting Goods

5 checks you should do on a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

• Is it the top 25% annual dividend yield payer?

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has dividend per share amount increased over the past?

• Is its earnings sufficient to payout dividend at the current rate?

• Will it be able to continue to payout at the current rate in the future?

NasdaqGS:BGFV Historical Dividend Yield May 27th 18

How well does Big 5 Sporting Goods fit our criteria?

The current payout ratio for BGFV is negative, which means that it is loss-making, and paying its dividend from its retained earnings. 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. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time. In terms of its peers, Big 5 Sporting Goods produces a yield of 7.14%, which is high for Specialty Retail stocks.

Next Steps:

If Big 5 Sporting Goods is in your portfolio for cash-generating reasons, there may be better alternatives out there. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three essential aspects you should look at:

1. Historical Performance: What has BGFV’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Big 5 Sporting Goods’s board and the CEO’s back ground.

3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see pass 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.