CARTER'S INC (NYSE:CRI) – A High-Yield Dividend Stock Worth Considering

CARTER'S INC (NYSE:CRI) stands out as a compelling option for dividend investors, offering an attractive yield alongside solid financial health and profitability. The company, known for its children’s apparel brands like Carter’s and OshKosh B'gosh, has been flagged by our dividend screener for its strong fundamentals.

Dividend Strength

• High Yield: CRI currently offers a dividend yield of 8.82%, significantly above the industry average of 3.56% and the S&P500 average of 2.36%.
• Reliable Track Record: The company has paid dividends for at least 10 years, with an average annual growth rate of 16.75% over the past five years.
• Payout Sustainability: While the payout ratio is slightly elevated at 58.78%, it remains manageable given the company’s profitability. However, investors should note that earnings are expected to decline, which may pressure future dividend growth.

Profitability & Financial Health

• Solid Profit Margins: CRI maintains a profit margin of 5.67% and an operating margin of 8.95%, outperforming many peers in the textiles and apparel industry.
• Strong Balance Sheet: The company has a healthy Altman-Z score of 3.26, indicating low bankruptcy risk, and a manageable debt-to-equity ratio of 0.59.
• Liquidity: With a current ratio of 2.56 and quick ratio of 1.40, CRI is well-positioned to meet short-term obligations.

Valuation

CRI appears undervalued, trading at a P/E ratio of 5.65, far below both the industry and S&P500 averages. Its enterprise value to EBITDA ratio also suggests a cheap valuation compared to peers.

For a deeper dive into CRI’s fundamentals, review the full report here.

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Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.