Stock Analysis

Bloomin' Brands (NASDAQ:BLMN) Is Due To Pay A Dividend Of $0.24

Published
NasdaqGS:BLMN
Source: Shutterstock

Bloomin' Brands, Inc. (NASDAQ:BLMN) has announced that it will pay a dividend of $0.24 per share on the 20th of March. This means the annual payment is 3.4% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Bloomin' Brands

Bloomin' Brands' Earnings Easily Cover The Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, Bloomin' Brands' earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 3.3% over the next year. If the dividend continues on this path, the payout ratio could be 37% by next year, which we think can be pretty sustainable going forward.

historic-dividend
NasdaqGS:BLMN Historic Dividend February 27th 2024

Bloomin' Brands' Dividend Has Lacked Consistency

It's comforting to see that Bloomin' Brands has been paying a dividend for a number of years now, however it has been cut at least once in that time. This suggests that the dividend might not be the most reliable. Since 2015, the dividend has gone from $0.24 total annually to $0.96. This implies that the company grew its distributions at a yearly rate of about 17% over that duration. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

The Dividend Looks Likely To Grow

Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. It's encouraging to see that Bloomin' Brands has been growing its earnings per share at 20% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Bloomin' Brands' prospects of growing its dividend payments in the future.

Bloomin' Brands Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Bloomin' Brands might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Case in point: We've spotted 3 warning signs for Bloomin' Brands (of which 1 is a bit concerning!) you should know about. Is Bloomin' Brands not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Valuation is complex, but we're helping make it simple.

Find out whether Bloomin' Brands is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.