After the results in the last two years, I will say no. I’m joking;)) I will get to that soon. Before starting, here are some words about Marks and Spencer.

Who is Marks and Spencer?

Marks & Spencer (M&S), is a  British retail ( food, clothing, and home wear) company with a rich history dating back to the late 19th century and also has been voted in 2023 the most trusted British iconic brand.

It has not only been an iconic shopping destination but also an attractive investment choice for income-seeking investors. Over the years, M&S has built a legacy of stable and growing dividends, making it a favorite among shareholders looking for reliable returns. In this blog post, we will delve into the dividend history of Marks & Spencer and explore the factors that have contributed to its success in maintaining a firm dividend policy.

History of Marks and Spencer dividend payments?

Marks & Spencer’s dividend journey traces back to its early years when the company prioritized rewarding its shareholders. As the business expanded and flourished, so did the dividends. M&S became known for its consistent dividend payments, reflecting its robust financial position and commitment to delivering value to shareholders.

Starting with 2020 M&S suspended dividend payments due to large investments that’s has been done to reshape the business and back to a profit track, but things start to change in 2023, the company plans to reintroduce dividend payments due to growth in profitability for the business.

In the table above you have a clear presentation of the dividends paid by the company since become public. As you can see the company paid a steady dividend.

What qualifies a company to be an aristocrat?

To be considered a dividend aristocrat company, that company needs to have an impressive at least 25 years of consecutive dividend payments. If we analyze M&S dividends paid since went public, we will notice that the company might be considered with some exceptions : (2020,2021,2022) where the company has paid any dividends.

Despite a lot of challenges that the company faced over the years, M&S with its products remains a brand that consumers love and also an entity that investors like.

Future challenges that M&S might face regarding dividend payments

1 Strong competition

Being a retail business M&S has strong competitors, which can be a treat for a business. Customer Life Time Value (CLTV) is how long a customer will stay with a company is not known exactly. Customers can easily migrate from one brand to another if they don’t find the products attractive, poor customer service, and so on. Being competitive in this segment of the market is the key for M&S to maintain its brand reputation.

2 Management decisions and capital allocation

As I said at the beginning of this article M&S hasn’t paid any dividends since 2019. The company invested heavily in the process of digitalization and the acquisition of other businesses: Ocado retail. If the company policy is to focus more on expansion or growth the probability to pay dividends to the shareholders remains low. Any investor or potential investor should have this in consideration before starting to invest in the company.

After all, is not something bad, if we look at other companies like Amazon or Berkshire Hattaway they don’t pay any dividends, they choose a growth strategy through capital allocation and acquisitions.

3 Dividend payout ratio

If the company will not able to provide a steady dividend increase over the years it will lose the interest of future dividend investors. As company profits will continue to soar and possibly the dividends too.

4 Future Outlook

We can’t predict what the future might present. In uncertain periods as we live now like high inflation and war in Ukraine every business has to adapt. Marks and Spencer’s policy is a balance between rewarding shareholders through dividends and investing in the company’s growth.

Conclusion

I consider M&S still a very good business for dividend investors. The company has a strong brand reputation and good products will continue to be like that, making it one of the companies that deserve to put money on it.