Nordstrom, Inc. ( NYSE:JWN ) is a true Dividend Rock Star. Its yield of 4.0% makes it one of the market's top dividend payer. In the past ten years, Nordstrom has also grown its dividend from $0.64 to $1.48. Below, I have outlined more attractive dividend aspects for Nordstrom for income investors who may be interested in new dividend stocks for their portfolio.
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What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically:
- Its annual yield is among the top 25% of dividend payers
- It has paid dividend every year without dramatically reducing payout in the past
- Its has increased its dividend per share amount over the past
- It can afford to pay the current rate of dividends from its earnings
- It is able to continue to payout at the current rate in the future
High Yield And Dependable
Nordstrom's yield sits at 4.0%, which is high for Multiline Retail stocks. But the real reason Nordstrom stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you're investor who wants a robust cash inflow from your portfolio over a long period of time.
If there is one thing that you want to be reliable in your life, it's dividend stocks and their constant income stream. In the case of JWN it has increased its DPS from $0.64 to $1.48 in the past 10 years. It has also been paying out dividend consistently during this time, as you'd expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.
The current trailing twelve-month payout ratio for the stock is 44%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 40% which, assuming the share price stays the same, leads to a dividend yield of 4.3%. Furthermore, EPS should increase to $3.71.
When considering the sustainability of dividends, it is also worth checking the cash flow of a company . Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
Investors of Nordstrom can continue to expect strong dividends from the stock. With its favorable dividend characteristics, if high income generation is still the goal for your portfolio, then Nordstrom is one worth keeping around. However, given this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I've compiled three important factors you should further examine:
- Future Outlook : What are well-informed industry analysts predicting for JWN’s future growth? Take a look at our free research report of analyst consensus for JWN’s outlook.
- Valuation : What is JWN worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether JWN is currently mispriced by the market.
- Other Dividend Rockstars : Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here .
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.