Best Buy’s 6.1% Dividend Yield and 22-Year Streak Look Safe, but Here’s the Risk

Best Buy (NYSE: BBY) has raised its dividend for 22 consecutive years, and the banal present yields 6.1% astatine a terms of $61.71. Is this output a genuine opportunity, oregon is the marketplace pricing successful occupation ahead?

Best Buy posted adjusted diluted EPS of $6.43 for FY26, with an yearly dividend tally complaint of $3.84 per share, putting the net payout ratio astatine 57.2%. The quarterly dividend of $0.96 is covered much than doubly by the $2.61 Q4 EPS.

Free currency travel sum is tighter. Best Buy generated $1.258 cardinal successful escaped currency travel successful FY26 against $801 cardinal successful communal dividend payments, a sum ratio of 1.57x, down from 1.72x the anterior year. FY2024 saw sum gaffe beneath 1.0x astatine 0.84x. The inclination bears watching.

Have You work The New Report Shaking Up Retirement Plans? Americans are answering 3 questions and galore are realizing they tin retire earlier than expected.

Best Buy carries $11.706 cardinal successful full liabilities against $2.964 cardinal successful shareholders equity. Much of those liabilities are operating lease obligations, modular for large-format retailers. Cash stands astatine $1.738 billion, up 10.14% twelvemonth implicit year. EBITDA is $2.602 billion, with involvement sum astatine an implied operating borderline of 5.02% connected $41.691 cardinal successful revenue.

Best Buy raised its payout each twelvemonth done the 2008 fiscal situation and the pandemic.

The astir caller summation is simply a acold outcry from the double-digit maturation of 2021 and 2022. Management is protecting the streak, not expanding shareholder income.