The Bearish Case For American Eagle Outfitters: An Overvalued Dividend Stock [View article]
While you're welcome to agree or disagree with the final conclusions I make, the numbers themselves are factual as reported by Reuters. As some of the other comments have pointed out, they did in fact payout more than 100% of earnings, though it was through a special dividend (which you can argue can be excused for tax purposes).
The Bearish Case For American Eagle Outfitters: An Overvalued Dividend Stock [View article]
I'm glad you're reconsidering the safety of the dividend. I think dividend investors should be the ones that are most weary of this stock, at least until they prove some sort of dividend consistency.
The Bearish Case For American Eagle Outfitters: An Overvalued Dividend Stock [View article]
You're absolutely right, my mistake. I should have been more careful, as they paid 177% of EPS, not FCF.
Reuters reports an increase from $925 M to $1.287 B which means you are correct about the 40% increase. However, consider the fact that in 2010 they paid out 102% of EPS and 146% in 2012 (according to F.A.S.T Graphs). I agree that it's nice when companies distribute excess capital to shareholders but not at the expense of future growth.
They only paid out a maximum of 20% before 2008 when the recession hit and payouts have been anything but stable since (46% in 2008, 49% in 2009, 102% in 2010, 56% in 2011, and 146% in 2012). While it's up to you to determine what this may mean, I don't believe the potential for reward here outweighs the risk, especially for a dividend investor.
I appreciate your critique and it helps me make sure that I check and double check everything I write about so please keep it coming!
The Bearish Case For American Eagle Outfitters: An Overvalued Dividend Stock [View article]
The Bearish Case For American Eagle Outfitters: An Overvalued Dividend Stock [View article]
The Bearish Case For American Eagle Outfitters: An Overvalued Dividend Stock [View article]
The Bearish Case For American Eagle Outfitters: An Overvalued Dividend Stock [View article]
The Bearish Case For American Eagle Outfitters: An Overvalued Dividend Stock [View article]
Reuters reports an increase from $925 M to $1.287 B which means you are correct about the 40% increase. However, consider the fact that in 2010 they paid out 102% of EPS and 146% in 2012 (according to F.A.S.T Graphs). I agree that it's nice when companies distribute excess capital to shareholders but not at the expense of future growth.
They only paid out a maximum of 20% before 2008 when the recession hit and payouts have been anything but stable since (46% in 2008, 49% in 2009, 102% in 2010, 56% in 2011, and 146% in 2012). While it's up to you to determine what this may mean, I don't believe the potential for reward here outweighs the risk, especially for a dividend investor.
I appreciate your critique and it helps me make sure that I check and double check everything I write about so please keep it coming!