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As of Tuesday, the company’s stock price stood at $10.63, reflecting a dividend yield of approximately 1.9%. This yield is supported by a modest payout ratio of 9.3% from after-tax income, suggesting a conservative approach to distributing profits back to shareholders. Additionally, Designer Brands maintains a healthy free cash flow payout percentage at 4.7%, indicating financial stability and the ability to sustain dividend payments.
Looking at the company’s financial performance over time, Designer Brands has shown an impressive growth in earnings per share over the past five years, with an annual increase rate of about 23%. This robust earnings progression underscores the company’s potential as a compelling investment opportunity.
However, it’s worth noting that despite this positive earnings trajectory over the decade, dividends have seen an average annual decrease of nearly 18%. This reduction could be interpreted as a strategic move towards reinvestment or may highlight some inconsistencies within the business operations and a history of fluctuating dividend policies.
Investors are keeping a close eye on Designer Brands as Wednesday marks the cutoff for those looking to secure their participation in the December dividend distribution. The firm’s track record suggests confidence in maintaining its dividends barring any dramatic downturns in earnings. With prudent financial management and strong earnings growth, Designer Brands continues to present itself as an attractive option for those seeking steady investment opportunities in the retail sector.
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