CHARLOTTE, N.C. - The Cato Corporation (NYSE: CATO), a specialty retailer of value-priced fashion apparel and accessories, announced a regular quarterly dividend of $0.17 per share on Friday. This dividend is payable on September 30, 2024, to shareholders who are on record as of September 16, 2024.
The declared dividend equates to an annualized payment of $0.68 per share, representing a yield of 14.0% based on the closing market price of the company's stock as of August 29, 2024.
Cato Corporation operates under three concepts: Cato, Versona, and It's Fashion. The company prides itself on offering exclusive merchandise at competitive prices, targeting consumers seeking fashion and quality comparable to mall specialty stores. In addition to its brick-and-mortar locations, the company also retails its Cato and Versona merchandise online.
In the press release, the company made forward-looking statements regarding expected operational financial results and other market factors that might influence the business, such as consumer spending and costs. These statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations.
Potential factors that could impact the company's performance include changes in consumer confidence, economic conditions, competitive pressures, fashion trends, and government policies. Additionally, external factors like public health threats and broader market volatility could affect the company’s operations and financial outcomes.
The company's forward-looking statements are based on current expectations and are made in the context of the Private Securities Litigation Reform Act of 1995. Cato Corporation has cautioned that these statements are subject to various risks and uncertainties, and there is no obligation to update or revise them in the future.
The information reported is based on a press release statement from The Cato Corporation.
InvestingPro Insights
The Cato Corporation's recent dividend announcement of $0.17 per share is a testament to its commitment to shareholder returns, marking 33 consecutive years of maintained dividend payments. This dedication is underscored by the company's significant dividend yield of 14.0%, based on the closing market price as of August 29, 2024, which is notably high for the industry. An InvestingPro Tip highlights this substantial dividend yield as a key consideration for investors seeking income-generating stocks.
Despite the attractive dividend, Cato Corporation's financial metrics present a mixed picture. The company's market capitalization stands at approximately $93.49 million, reflecting a relatively small player within the retail sector. Additionally, the firm's revenue has shown a decline over the last twelve months as of Q1 2023, with a decrease of 7.08%. This downturn in revenue growth is also evident on a quarterly basis, with a 7.79% drop in Q1 2023. These figures suggest that while the dividend may be appealing, Cato's underlying business performance warrants careful scrutiny.
Further analysis from InvestingPro reveals that Cato is trading at a low revenue valuation multiple, which could indicate that the stock is undervalued in the market. However, the company's negative P/E ratio of -5.37 suggests that it has been unprofitable over the last twelve months. This is an important detail for investors to consider, as it could impact the sustainability of future dividends.
For those interested in a deeper dive into Cato's financials and future outlook, InvestingPro offers additional InvestingPro Tips that can provide valuable insights. Currently, there are six more tips available, which can be accessed by visiting https://www.investing.com/pro/CATO.
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