The retail sector has seen a lot of pressure in recent years, and VF Corp. (NYSE: VFC) hasn't been immune to the downward trends that the industry has suffered through during that period. Yet the company behind well-known brand names like The North Face, Vans, and Timberland has found ways to get through difficult conditions before. Bullish investors are optimistic that its premium products will remain fan favorites and keep shoppers coming back for more, whether they visit physical store locations or buy those products online.
One of the big benefits that VF investors have gotten over the years is a steady and rising dividend. But some investors still aren't sure whether the apparel giant can manage to keep itself moving forward in a fast-changing retail world. Below, we'll look more closely at VF Corp. to see whether investors can rely on its quarterly payout going forward.
Dividend stats on VF Corp.
| Current Quarterly Dividend Per Share | $0.46 |
| Current Yield | 2.5% |
| Number of Consecutive Years With Dividend Increases | 45 years |
| Payout Ratio | 67% |
| Last Increase | December 2017 |
Data source: Yahoo! Finance. Last increase refers to ex-dividend date.
How does VF's dividend yield look?
Dividend investors like high yields, but stocks that pay too high a yield arouse suspicion. VF Corp.'s 2.5% dividend yield is just about right: not so high that it raises major concerns about sustainability, but above the market's average of around 2%.
VF's stock has seen fairly wide swings in yield over the past decade, ranging from a low of around 1.5% a couple years ago to levels as high as 5% during the worst of the financial crisis. A recent slump in the stock price was partially to blame for bringing the yield higher, but VF's dividend growth has provided a strong foundation for its level of income.
Image source: VF Corp.
Payout ratio
VF Corp.'s payout ratio is now around 70%. That's not dangerously high, but it doesn't leave a lot of excess earnings for the retail products producer to reinvest back into its business. It's also higher than VF has historically seen, with the stock spending several years during the early 2010s in a much safer range of 30% to 35%.
Just since 2014, VF's payout ratio has doubled, reflecting a combination of higher dividends and weaker earnings. Impairment charges have been largely responsible for a slumping bottom line for the company, but VF is working on restructuring efforts in order to make the business stronger than ever. As those charges disappear, VF hopes to get its earnings back to more normal levels and reduce its payout ratio accordingly.