|USD per share|
Gap paid a total dividend of 365 million USD last year, for a market capitalization of 9,643 millions. Dividend per share of Gap is 0.92 USD, and his stock market price 24.29 USD.
According to the chart below, where dividend yield is displayed, Gap has a dividend yield of 3.79%, which is higher than the amount offered by both the market average and companies from USA. It is also bigger than average of Consumer Services industry. This high dividend yield might be a sign to worry about the future of the company so deeper analysis is needed.
About the ability of Gap to maintain his current dividend of USD 0.92 per share, an amount that accounts for 3.79%, we should study its payout ratio both on earnings and on cash-flows (see chart below). Gap payout on ernings is currently 53.80%, which is higher than the market average, and companies of Consumer Services industry, which are 39.68% and 39.75% respectively. Both figures show that Gap can have problems to keep with his present dividend yield.
The payout on earnings should be complemented with the payout on cash flow since it is this latter amount the one which can be distributed to shareholders. Cash flow per share of Gap is USD 4.34 per share, which is higher than the dividend per share paid by the company of USD 0.92, so the company generates enough cash to maintain his dividend in the future.
The following figure shows payout ratios over earnings and cashflow of Gap, compared againt world market average, USA companies, Consumer Services industry and General Retailers sector companies. You might also need to check full financial report of Gap.
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