Tractor Supply Company Rewards Investors With 15% Quarterly Dividend Increase (TSCO)
By: Ned Piplovic,
Featured Image Source: http://ir.tractorsupply.com/corporate-profile
Tractor Supply Company (NASDAQ: TSCO) will continue its streak of raising its annual dividend payout every year since 2010 with a 14.8% dividend boost to its upcoming quarterly distribution.
While the company’s current 1.7% dividend yield trails behind many sector averages, it outperforms the average yield of the Specialty Retail market segment by more than 60%. Additionally, the company’s total annual payout has been rising at an average rate of more than 30% annually and is currently tracking more than 50% above its own five-year average yield.
Investors seeking equities with rising dividend income and potentially robust appreciation should take a closer look at TSCO to ensure that the company’s fundamentals and outlook are in line with their portfolio investment strategy. Interested investors should act before the company’s next ex-dividend date on May 25, 2018 to ensure eligibility for the dividend payment on June 12, 2018.
Tractor Supply Company (NASDAQ:TSCO)
Headquartered in Brentwood, Tennessee and founded in 1938 as a mail order catalog business offering tractor parts to America’s farmer families, the Tractor Supply Company operates rural lifestyle retail stores today. The company offers a selection of merchandise for livestock, pet and small animal care products. Additionally, the company sells hardware, truck accessories, towing products, tools and power equipment, as well as an assortment of work and recreational clothing and footwear. As of March 31, 2017, the company operated more than 1,800 retail stores in 49 states under the Tractor Supply Company, Del’s Feed & Farm Supply and Petsense names. Furthermore, the company offers its products through two e-commerce websites – TractorSupply.com and Petsense.com.
After more than seven decades of existence, the company started distributing dividends in 2010 and has boosted its annual dividend amount every year since then. Over the past eight years the company advanced its total annual dividend amount almost nine-fold. That level of growth is equivalent to a 31.2% average annual growth rate.
Tractor Supply is continuing this growth trend with a 14.8% hike from the $0.27 dividend payout in the previous period to the upcoming $0.31 per share amount. This new amount is equivalent to a $1.24 annualized distribution and a 1.7% forward yield. While low when compared to many other dividend-paying companies, TSCO’s current yield is nearly 60% higher than the company’s own five-year average yield of 1.1%. Additionally, the company’s current yield outperforms the 1.09% average yield of all the companies in the Specialty Retail market segment by more than 60% and only trails the current yields of Barnes & Noble (NYSE:BKS) and Office Depot (NASDAQ:ODP) in that segment.
At the beginning of the trailing 12 months in mid-May 2017, the share price was riding a downtrend that began one year earlier in May of 2016. The price continued sliding until July 12, 2017, when a 52-week low of $49.87 was reached. The share price then reversed the trend and ascended 65% with minimal volatility, achieving a 52-week high of $82.68 on January 22, 2018.
During the overall market sell-off in February and March 2018, TSCO’s share price pulled back nearly 30% from the January peak and gave back all its gains by retreating close to its May 2017 levels. However, the share price reversed direction again, recovered more than half of its losses and closed on May 15, 2018 at $70.86. That closing price was nearly 20% higher than it was 12 months earlier and 42% above the 52-week low from July 2017.
The prolonged downtrend between May 2016 and July 2017 left the company’s shareholders with a double-digit loss over the past three years. However, that poor performance seems to be an anomaly. While still affected by that share price drop, the company managed a 30% total return over the past five years and a total return of more than 20% over the past 12 months.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.