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Founded in 1975 and based in Dallas, Texas, Brinker International (EAT
The company owns, operates or franchises nearly 1,700 locations in 31 countries and two U.S. territories. Almost 97% of the current restaurants operate under the Chili’s Grill & Bar brand, and the remaining 3% operate under the Maggiano’s Little Italy brand name.
The company’s current quarterly dividend distribution of $0.38 per share is 11.8% higher than the $0.34 per share quarterly payout from the same period last year. This payout converts to a $1.52 annualized distribution and a current yield of 4.3%, which is 60% higher than company’s 2.7% average yield over the past five years.
The current 4.3% yield exceeds the average yields for the restaurants sub-segment by about 130%. Brinker has missed a dividend hike only once since it started paying dividends back in 2005.
Over the past 13 years, the company has seen a 14.3% average annual growth rate and has increased its total annualized dividend payout 470% since 2005. The result of compounding annual payouts at nearly 15% for nine consecutive years is a 245% total annual dividend payout enhancement between 2010 and 2018.
Brinker International currently distributes 55% of its earnings as dividends, which indicates that the company should be able to continue supporting a 14% to 15% annual dividend hike.
Additionally, the company released its quarterly financials on January 30, 2018 with mixed results. Total revenues were 0.6% lower than analyst’s expectation, who were expecting the same revenue results as the same period last year.
The company’s 14.9% operating margin was slightly lower than the 15.1% for the same quarter last year. However, the $0.87 quarterly earnings per diluted share outpaced the expectation of $0.72, an outperformance of nearly 21%.
Ned Piplovic is editor of DividendInvestor.
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