If you are interested in cashing in on Ark Restaurants Corp’s (NASDAQ:ARKR) upcoming dividend of $0.25 per share, you only have 3 days left to buy the shares before its ex-dividend date, 18 December 2017, in time for dividends payable on the 03 January 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Ark Restaurants’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for Ark Restaurants
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is its annual yield among the top 25% of dividend-paying companies?
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Does it consistently pay out dividends without missing a payment of significantly cutting payout?
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Has the amount of dividend per share grown over the past?
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Is is able to pay the current rate of dividends from its earnings?
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Will the company be able to keep paying dividend based on the future earnings growth?
How does Ark Restaurants fare?
The current payout ratio for ARKR is 92.15%, which means that the dividend is not well-covered by its earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Dividend payments from Ark Restaurants have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends. Compared to its peers, Ark Restaurants generates a yield of 4.00%, which is high for hospitality stocks.
What this means for you:
Are you a shareholder? Investors may not have the best feeling about their investment in Ark Restaurants right now, in terms of its dividend attributes. It may be beneficial exploring other dividend stocks as alternatives to Ark Restaurants or even look at high-growth stocks to complement your steady income stocks. I suggest continuing your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? After digging a little deeper into Ark Restaurants’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. As always, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Check our latest free fundmental analysis to explore other aspects of Ark Restaurants.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.