#AFFAIR 2REMEMBER COLUMBIA FREE#

First, we like that the company's dividend payments appear well covered, although the retained capital also needs to be effectively reinvested. 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. We think this is ideal from an investment perspective, if the company is able to reinvest these earnings effectively. Earnings per share have grown rapidly, and the company is retaining a majority of its earnings. Strong earnings per share (EPS) growth might encourage our interest in the company despite fluctuating dividends, which is why it's great to see Columbia Sportswear has grown its earnings per share at 26% per annum over the past five years. Dividend Growth Potentialĭividend payments have been consistent over the past few years, but we should always check if earnings per share (EPS) are growing, as this will help maintain the purchasing power of the dividend. With rapid dividend growth and no notable cuts to the dividend over a lengthy period of time, we think this company has a lot going for it.

This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.Ĭonsider getting our latest analysis on Columbia Sportswear's financial position here. It's encouraging to see that the dividend is covered by both profit and cash flow.

#AFFAIR 2REMEMBER COLUMBIA FREE#

Of the free cash flow it generated last year, Columbia Sportswear paid out 33% as dividends, suggesting the dividend is affordable. In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. With a low payout ratio, it looks like the dividend is comprehensively covered by earnings. In the last year, Columbia Sportswear paid out 21% of its profit as dividends. So we need to form a view on if a company's dividend is sustainable, relative to its net profit after tax. If a company is paying more than it earns, the dividend might have to be cut. NasdaqGS:COLM Historical Dividend Yield, June 29th 2019 Payout ratiosĬompanies (usually) pay dividends out of their earnings.

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