July 23, 2025 a 07:31 am
ROST: Dividend Analysis - Ross Stores, Inc.
📊 Ross Stores, Inc. has a solid track record of dividend payments, maintaining a consistent dividend history over 32 years without any recent suspension or cuts. With a dividend yield of 1.10% and a modest payout ratio, the stock provides a potential stable income for investors. However, the dividend growth over the past 5 years indicates a moderate trend that investors should consider when assessing future income potential.
Overview
| Category | Details |
|---|---|
| Sector | Consumer Discretionary |
| Dividend Yield | 1.10 % |
| Current Dividend per Share | 1.49 USD |
| Dividend History | 32 years |
| Last Cut or Suspension | None |
Dividend History
🗣️ Ross Stores has been distributing dividends for over three decades, showcasing reliability and commitment to returning value to shareholders. This historical data is crucial for gauging the company's resolve during economic downturns.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.810 |
| 2024 | 1.470 |
| 2023 | 1.340 |
| 2022 | 1.24 |
| 2021 | 1.140 |
Dividend Growth
📈 Analyzing dividend growth provides insight into the company's profitability and investment in shareholder returns. With an average growth rate of 7.58% over 5 years, the trend suggests moderate but steady increases, crucial for long-term dividend attractiveness.
| 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
📉 The payout ratio is a critical metric for assessing dividend sustainability. Ross Stores maintains a conservative payout ratio of 23.21% (EPS-based) and 30.28% (FCF-based), indicating ample room to cover its dividends.
| Key Figure | Ratio |
|---|---|
| EPS-based | 23.21% |
| Free cash flow-based | 30.28% |
The low EPS and FCF payout ratios suggest that dividends are well covered by earnings and free cash flow, providing a level of security for future payouts.
Cashflow & Capital Efficiency
✅ Cash flow measures indicate financial health and operational efficiency. Ross Stores' free cash flow yield and earnings yield suggest a capability to generate cash and reinvest effectively.
| Year | 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 | 0.73% | 0.71% | 0.65% |
| Free Cash Flow / Operating Cash Flow Ratio | 69.45% | 69.66% | 61.28% |
The cash flow metrics reveal Ross Stores' robust ability to generate free cash and manage capital efficiently, underpinning its operational stability.
Balance Sheet & Leverage Analysis
⚠️ Analyzing leverage ratios helps determine financial risk and stability. Ross Stores shows a manageable debt structure, indicated by moderate debt-to-equity and current ratios.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 103.14% | 117.99% | 133.06% |
| Debt-to-Assets | 38.12% | 40.19% | 42.53% |
| Debt-to-Capital | 50.77% | 54.13% | 57.09% |
| Net Debt to EBITDA | 0.29 | 0.30 | 0.48 |
| Current Ratio | 1.55 | 1.77 | 1.90 |
| Quick Ratio | 1.09 | 1.24 | 1.34 |
| Financial Leverage | 2.71 | 2.94 | 3.13 |
The balance sheet and leverage metrics illustrate a solid financial position, suggesting stability and sound risk management by Ross Stores.
Fundamental Strength & Profitability
📊 Evaluating margin ratios and returns is vital for assessing profitability and operational efficiency. Ross Stores maintains healthy margins, reflecting effective cost management.
| Year | 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%, EBIT: 13.35%, EBITDA: 15.46%, Gross: 27.78% | Net: 9.20%, EBIT: 12.49%, EBITDA: 14.55%, Gross: 27.36% | Net: 8.09%, EBIT: 11.06%, EBITDA: 12.76%, Gross: 25.40% |
| R&D to Revenue | 0% | 0% | 0% |
The company's strong return figures and efficient margin management highlight strong fundamentals and profitability.
Price Development
Dividend Scoring System
| Category | Score | Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 4 | |
| Dividend growth | 3 | |
| Payout ratio | 5 | |
| Financial stability | 4 | |
| Dividend continuity | 4 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 31/40
Rating
🗣️ Ross Stores, Inc. demonstrates strong dividend sustainability reflected through consistent growth, strategic payout ratios, and dependable financial metrics. The stock is an enticing option for income-focused investors seeking stability and moderate growth prospects.