Yahoo Finance Village Super Market, Inc. (NASDAQ:VLGE.A) Passed Our Checks, And It's About To Pay A US$0.25 Dividend
Village Super Market, Inc. (NASDAQ:VLGE.A) stock is about to trade ex-dividend in four days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase Village Super Market's shares on or after the 3rd of April, you won't be eligible to receive the dividend, when it is paid on the 25th of April.
The company's upcoming dividend is US$0.25 a share, following on from the last 12 months, when the company distributed a total of US$1.00 per share to shareholders. Looking at the last 12 months of distributions, Village Super Market has a trailing yield of approximately 3.5% on its current stock price of US$28.61. If you buy this business for its dividend, you should have an idea of whether Village Super Market's dividend is reliable and sustainable. As a result, readers should always check whether Village Super Market has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Village Super Market
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see Village Super Market paying out a modest 28% of its earnings. A useful secondary check can be to evaluate whether Village Super Market generated enough free cash flow to afford its dividend. Thankfully its dividend payments took up just 26% of the free cash flow it generated, which is a comfortable payout ratio.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see how much of its profit Village Super Market paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see Village Super Market's earnings per share have risen 14% per annum over the last five years. Earnings per share have been growing rapidly and the company is retaining a majority of its earnings within the business. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Village Super Market's dividend payments are broadly unchanged compared to where they were 10 years ago.
Final Takeaway
Is Village Super Market an attractive dividend stock, or better left on the shelf? Village Super Market has been growing earnings at a rapid rate, and has a conservatively low payout ratio, implying that it is reinvesting heavily in its business; a sterling combination. There's a lot to like about Village Super Market, and we would prioritise taking a closer look at it.
Keen to explore more data on Village Super Market's financial performance? Check out our visualisation of its historical revenue and earnings growth.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
