Tapestry Inc (NYSE:TPR): Dividend Is Coming In 4 Days, Should You Buy?

On the 02 July 2018, Tapestry Inc (NYSE:TPR) will be paying shareholders an upcoming dividend amount of $0.34 per share. However, investors must have bought the company’s stock before 07 June 2018 in order to qualify for the payment. That means you have only 4 days left! What does this mean for current shareholders and potential investors? Below, I will explain how holding Tapestry can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for Tapestry

5 checks you should use to assess a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Does it pay an annual yield higher than 75% of dividend payers?

• Has it paid dividend every year without dramatically reducing payout in the past?

• Has dividend per share risen in the past couple of years?

• Can it afford to pay the current rate of dividends from its earnings?

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

NYSE:TPR Historical Dividend Yield Jun 2nd 18

How well does Tapestry fit our criteria?

The company currently pays out 113.59% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is not sufficiently covered by its earnings. However, going forward, analysts expect TPR’s payout to fall into a more sustainable range of 45.62% of its earnings, which leads to a dividend yield of 3.23%. In addition to this, EPS should increase to $2.46, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. 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. The reality is that it is too early to consider Tapestry as a dividend investment. It has only been consistently paying dividends for 9 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, Tapestry produces a yield of 3.07%, which is high for Luxury stocks but still below the market’s top dividend payers.

Next Steps:

After digging a little deeper into Tapestry’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three key aspects you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for TPR’s future growth? Take a look at our free research report of analyst consensus for TPR’s outlook.

2. Valuation: What is TPR worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether TPR is currently mispriced by the market.

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.