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CAKE dividend yield exceeds 3%

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L.considering the universe of stocks we are considering Dividend Channel, traded on Wednesday, shares of Cheesecake Factory Inc. (Symbol: CAKE) was given above the 3% mark on the basis of its quarterly dividends (up to $ 1.08 year-on-year), and shares passed from hand to hand for just $ 35.69 a day. Dividends are especially important to investors because, historically, dividends provide a significant share of the stock market’s total profits. To illustrate, suppose you bought shares of the iShares Russell 3000 ETF (IWV) on May 31, 2000 – you would have paid $ 78.27 per share. Going forward to 31.05.2012, and each share was worth $ 77.79 on that date, a loss of $ 0.48 or 0.6% less than twelve years. But now consider that you have amassed a whopping $ 10.77 per share of dividends over the same period, increasing earnings to 13.15%. Even with reinvested dividends, this is only an average annual total return of about 1.0%; so for comparison a yield collection above 3% would look much more attractive if that profit was sustainable. Cheesecake Factory Inc. (Symbol: CAKE) is a member of Russell 3000, which gives it the special status of one of the largest 3,000 companies in the US stock markets.

In general, dividend amounts are not always predictable and tend to correspond to the ups and downs of each company’s profitability. In the case of Cheesecake Factory Inc., looking at the CAKE history chart below, one can judge whether the latest dividends are likely to persist, and in turn whether to expect a 3% annual return.


Free report: top 7% dividends (paid monthly)

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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.

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