Dividends4Life: Is Ross Stores, Inc. A Smart Choice For Dividend Investors?

Today we’ll take a closer look at Ross Stores, Inc. (NASDAQ:ROST) from a dividend investor’s perspective. Owning a strong business and reinvesting the dividends is widely seen as an attractive way of growing your wealth. Yet sometimes, investors buy a stock for its dividend and lose money because the share price falls by more than they earned in dividend payments. A 1.1% yield is nothing to get excited about, but investors probably think the long payment history suggests Ross Stores has some staying power. The company also bought back stock during the year, equivalent to approximately 3.5% of the company’s market capitalisation at the time.

When we look at a dividend stock, we need to form a judgement on whether the dividend will grow, if the company is able to maintain it in a wide range of economic circumstances, and if the dividend payout is sustainable. Firstly, we like that Ross Stores has low and conservative payout ratios. Next, growing earnings per share and steady dividend payments is a great combination. All these things considered, we think this organisation has a lot going for it from a dividend perspective. Companies that are growing earnings tend to be the best dividend stocks over the long term.

Source: Simply Wall St.

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