June 30, 2025 a 03:31 pm
ROST: Dividend Analysis - Ross Stores, Inc.
Ross Stores, Inc. (ROST) exhibits a robust dividend profile that appeals to income-focused investors. While its dividend yield is modest, the company demonstrates a solid history of sustained dividend payments for over 32 years. With a balanced payout ratio and strong fundamentals, ROST maintains a stable financial position, indicating potential for future dividend growth. However, investors should remain vigilant of market conditions that might impact profitability.
📊 Overview
Ross Stores operates in the Retail sector, providing consistent dividends with a yield of 1.1%. The current dividend per share is $1.49, with a commendable dividend history spanning 32 years. Importantly, there have been no recent dividend cuts or suspensions.
| Key Metric | Value |
|---|---|
| Sector | Retail |
| Dividend yield | 1.10% |
| Current dividend per share | $1.49 |
| Dividend history | 32 years |
| Last cut or suspension | None |
📈 Dividend History
The dividend history of Ross Stores reveals steady growth, reflecting the company's commitment to returning value to shareholders through consistent payouts. Such a track record is crucial, as it demonstrates reliability and financial stability.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | $0.810 |
| 2024 | $1.470 |
| 2023 | $1.340 |
| 2022 | $1.240 |
| 2021 | $1.140 |
📉 Dividend Growth
The dividend growth of Ross Stores over recent years is indicative of its moderate yet steady growth trajectory. Monitoring this growth is essential to assess future payout capabilities and potential returns.
| Time | Growth |
|---|---|
| 3 years | 8.84% |
| 5 years | 7.58% |
The average dividend growth is 7.58% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
Analyzing the payout ratio offers insights into the sustainability of dividend payments. Ross Stores maintains conservative payout ratios, ensuring dividends are covered by earnings and free cash flow.
| Key figure | Ratio |
|---|---|
| EPS-based | 23.21% |
| Free cash flow-based | 30.28% |
Both EPS-based and FCF-based payout ratios are sustainably low at 23.21% and 30.28%, respectively, indicating sufficient earnings and cash flow coverage.
Cashflow & Capital Efficiency
Ross Stores' robust cash flow and capital efficiency metrics reflect its ability to generate cash and achieve returns on invested capital. Monitoring these ratios is crucial for assessing operational efficiency and investment appeal.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.31% | 3.64% | 2.52% |
| Earnings Yield | 4.23% | 3.89% | 3.68% |
| CAPEX to Operating Cash Flow | 32.99% | 30.34% | 38.72% |
| Stock-based Compensation to Revenue | 0.74% | 0.71% | 0.65% |
| Free Cash Flow / Operating Cash Flow Ratio | 69.45% | 69.66% | 61.28% |
The data reflects strong cash flow stability with promising capital efficiency metrics, positively impacting investor returns and business sustainability.
Balance Sheet & Leverage Analysis
The balance sheet of Ross Stores demonstrates financial stability and modest leverage. Reviewing these figures helps gauge the company's credit risk and overall financial health.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.031 | 1.180 | 1.331 |
| Debt-to-Assets | 0.381 | 0.402 | 0.425 |
| Debt-to-Capital | 0.508 | 0.541 | 0.571 |
| Net Debt to EBITDA | 0.291 | 0.295 | 0.484 |
| Current Ratio | 1.617 | 1.767 | 1.899 |
| Quick Ratio | 1.093 | 1.244 | 1.342 |
| Financial Leverage | 2.706 | 2.936 | 3.128 |
The ratios suggest a well-managed leverage position with sound liquidity support, highlighting solid financial health conducive to enduring economic challenges.
Fundamental Strength & Profitability
Ross Stores' profitability metrics emphasize strong operational performance and efficient resource use. Evaluating these fundamentals assists in understanding competitive positioning and return effectiveness.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 37.95% | 38.48% | 35.26% |
| Return on Assets | 14.03% | 13.11% | 11.27% |
| Margins: Net | 9.90% | 9.20% | 8.09% |
| EBIT | 13.35% | 12.49% | 11.06% |
| EBITDA | 15.46% | 14.55% | 12.76% |
| Gross | 27.78% | 27.36% | 25.40% |
| R&D to Revenue | 0% | 0% | 0% |
Ross Stores illustrates robust profitability with impressive margins and returns, underscoring operational excellence and competitive strength.
Price Development
🗣️ Dividend Scoring System
This scoring system evaluates various criteria to provide an overall assessment of Ross Stores' dividend potential.
| Category | Score (1-5) | Score Bar |
|---|---|---|
| Dividend yield | 2 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 5 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Score: 33/40
✨ Rating
Ross Stores, Inc. maintains a sound dividend policy, supported by stable financial health and consistent growth. The company's strengths in dividend stability and financial management suggest that ROST is a solid consideration for dividend-seeking investors. Given its current profile, it offers a reliable investment with moderate growth potential, though the yield remains relatively low compared to some peers.