"Best Buy posted adjusted diluted EPS of $6.43 for FY26, with an annual dividend run rate of $3.84 per share, putting the earnings payout ratio at 57.2%. The quarterly dividend of $0.96 is covered more than twice by the $2.61 Q4 EPS."
"Best Buy carries $11.706 billion in total liabilities against $2.964 billion in shareholders equity. Much of those liabilities are operating lease obligations, standard for large-format retailers."
"CEO Corie Barry said on the Q4 FY26 earnings call: For the year, we returned to positive comparable sales and expanded our operating income rate."
"FY27 guidance calls for adjusted EPS of $6.30 to $6.60, keeping the payout ratio well within safe territory."
Best Buy has consistently raised its dividend for 22 years, currently yielding 6.1%. The earnings payout ratio stands at 57.2%, with free cash flow coverage at 1.57x. However, coverage has decreased from the previous year. The company has significant liabilities compared to shareholders' equity, but cash reserves have increased. Despite maintaining its dividend streak, growth has slowed significantly. CEO Corie Barry highlighted improvements in sales and operations, with FY27 guidance suggesting stable earnings while keeping the payout ratio safe.
Read at 24/7 Wall St.
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