Cracker Barrel Offers Shareholders 16 Consecutive Annual Dividend Boosts, 3% Dividend Yield (CBRL)
By: Ned Piplovic,
Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) has been serving its shareholders annual dividend boosts for the past 16 consecutive years and currently offers a 3% dividend yield as a side dish.
In addition to its regular dividend distributions, the company also distributed a significant special dividend equivalent to 76.5% of the total regular payouts in 2018. While the company continues to offer strong dividend payout growth, the share price leveled off its decade-long uptrend and declined slightly over the past 12 months. However, while the company presented mixed results for its first quarter of fiscal 2019, the overall performance was still positive and the outlook for the remainder of 2019 looks positive as well.
The overall share price pullback in 2018 might be an opportunity to take a position at currently discounted prices in anticipation of share price recovery. Even a modest share price recovery could push the company’s current total return over the trailing 12 months from its current single-digit percentage level into double digits like the company’s double-digit percentage long-term total returns over the last three and five years.
However, to claim eligibility for the next round of dividend distributions on the February 5, 2019, pay date, investors must own shares before the upcoming ex-dividend date on January 18, 2019.
Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)
Headquartered in Lebanon, Tennessee and founded in 1969, Cracker Barrel Old Country Store, Inc. operates the Cracker Barrel Old Country Store concept. The concept consists of a restaurant with a gift shop, which offers various decorative and functional items, such as rocking chairs, holiday and seasonal gifts, toys, apparel, music CDs, cookware and various other gift items. Additionally, the shop sells food, such as candies, preserves, pies, cornbread mixes, coffee, syrups and pancake mixes. The restaurant operations generate approximately 80% of the company’s total sales gift, with the gift shop contributing the remaining 20%. As of September 2018, the company operated 657 Cracker Barrel stores in 45 states and seven Holler & Dash Biscuit House locations in Alabama, Tennessee, North Carolina, Florida and Georgia.
Despite modest volatility marked by several pullbacks in excess of 10%, the company’s share price advanced more than 70% between January 2014 and the beginning of 2018. However, after reversing trend in late January 2018, the share price tumbled nearly 20% before bottoming out at its 52-week low of $143.80 on September 18, 2018.
Following its 52-week low in mid-September, the share price recovered all its losses for the year in less than two months. Unlike the overall markets and many other stocks – which started declining in early October 2018 – CBRL’s share price continued rising and reached its new 52-week high of $183.29 on November 27, 2018. However, at that point even CBRL’s share price reversed direction and lost almost 13% by Christmas Eve. Since its latest trend reversal, the share price has gained 4.4% and closed on January 8, 2019 at $165.95. While still 9.5% below its November 2018 peak and 2.7% lower than it was one year earlier, this closing price was 15.4% above its September 2018 low and more than 60% above its share price five years ago.
The company’s current $1.25 quarterly payout is 4.2% higher than the $1.20 distribution from the same period last year. This new quarterly amount corresponds to a $5.00 annual dividend payout and a 3% forward dividend yield. Because of the rapid share price growth over the past five years, the company’s current yield is more than a third lower than the 4.7% five-year yield average.
However, CBRL’s current yield is 46% above the 2.06% average yield of the overall Services sector, as well as nearly 85% above the simple average of the Restaurants industry segment. Additionally, even excluding companies in the Restaurants segments that do not pay dividends raises the simple average yield only to 2.44%, and CBRL’s current yield is still more than 23% above the average yield of the segment’s only dividend-paying companies.
In addition to the $4.90 regular annual dividend, CBRL paid a $3.75 special dividend IN August 2018. The $8.65 combined annual dividend payout yielded shareholders a 5.2% dividend income in 2018. The 2018 special dividend was the fourth consecutive year that the company rewarded its shareholders with a special dividend equivalent to at least 70% of the regular annual dividend payout.
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