Ross Stores Inc (ROST) Dividends

Ross Stores pays a modest dividend with a yield of 0.70%, which is below the broader Consumer Cyclical sector average, making it less attractive for investors seeking high current income. The dividend's sustainability is strong, supported by a low payout ratio. Using the provided EPS of $6.32 and the current annual dividend of approximately $1.51 (derived from the yield and share price), the payout ratio is a conservative 24%, leaving ample room for reinvestment and future increases. The company has a consistent track record of growing its dividend, which aligns with its stable financial performance. Assessing the dividend's foundation using the Quality Indicators from the investment framework, the company's free cash flow generation is adequate but not exceptionally strong, with an FCF yield of 2.4%. This indicates the dividend is covered, but the primary use of FCF appears to be reinvestment in the business and share repurchases. The balance sheet shows moderate leverage with a Debt/Equity ratio of 1.03, which is manageable but warrants monitoring as it exceeds the framework's favourable threshold of low/zero debt (Debt/EBITDA < 1.0x). For a value investor focused on income, the profile is stable but the low yield suggests the investment case relies more on capital appreciation and dividend growth than on generating significant passive income today. Analysis based on data as of 2024-05-15.