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Vash Patel

 
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  • The Bearish Case For American Eagle Outfitters: An Overvalued Dividend Stock [View article]
    Hope you don't disagree BECAUSE of past success! :)
    Feb 12 02:11 PM | Likes Like |Link to Comment
  • The Bearish Case For American Eagle Outfitters: An Overvalued Dividend Stock [View article]
    Why not use excessive cash to expand and increase revenue growth?
    Feb 12 02:09 PM | Likes Like |Link to Comment
  • 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).
    Feb 12 02:07 PM | Likes Like |Link to Comment
  • 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.
    Feb 11 08:48 PM | Likes Like |Link to Comment
  • 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!
    Feb 11 08:44 PM | Likes Like |Link to Comment
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