08-06-2014, 11:22 AM
(08-06-2014, 09:33 AM)TomK Wrote:(08-06-2014, 09:12 AM)EricL Wrote: They also announced a 7% dividend increase and guided for an expected payout ratio target of 30-35%, which is higher than what they've been paying in recent years.
(08-06-2014, 09:25 AM)Roadmap2Retire Wrote: I had a look at WAG a while ago and thought it was overvalued and decided not to initiate a position. I'll have to take a closer look at it now again. They have a great track record for the 5-yr and 10-yr divi growth rates.
By my math (annual look), this raise is about 10.5%. Not bad at all by objective measures, but definitely below their five year average, which is closer to 20%. The 35% payout ratio target is also notable. And worrisome? The payout ratio right now looks to be in the low to mid 40s. Does that spell much lower dividend growth in coming years? Unless earnings are really going to improve, maybe with the full Boots acquisition?
Hmmm thats a very good point. Their current payout is 43%, so are they expecting a big jump in earnings, to keep the payout 30-35%?
Its obvious that they cant keep growing their dividends as they have done in the past.