Last Update 3/10/25
Johnson Outdoors Inc. (JOUT) is a well-known name among outdoor enthusiasts, producing everything from fishing electronics and diving gear to camping equipment and kayaks. While the brand is recognized for its high-quality products, its stock has been under pressure due to financial struggles.
For dividend investors, JOUT presents an interesting case. The company offers an attractive yield, but with earnings slipping and revenue declining, there are some serious concerns about whether it can maintain its payouts. Let’s dive into the details.
Key Dividend Metrics
🤑 Dividend Yield: 4.85%
💰 Annual Dividend Payout: $1.32 per share
📅 Ex-Dividend Date: April 10, 2025
📆 Next Dividend Payment: April 24, 2025
📊 Payout Ratio: 272.34%
📈 5-Year Average Dividend Yield: 1.90%
Dividend Overview
A dividend yield of 4.85% might catch the eye of income-focused investors, especially since it’s significantly higher than the company’s five-year average of 1.90%. But there’s a reason for this increase—and it’s not because of dividend growth. The real story here is that the stock price has been declining, pushing the yield higher.
The biggest red flag is the payout ratio, which sits at an alarming 272.34%. In simple terms, this means the company is paying out far more in dividends than it earns. A sustainable dividend payout ratio is typically below 60%, with anything above 100% suggesting the company may need to cut its dividend if profits don’t recover.
While JOUT hasn’t officially announced any plans to reduce its dividend, the financial situation raises serious concerns about how long it can continue making these payments.
Dividend Growth and Safety
Unlike some dividend stocks that consistently raise their payouts, Johnson Outdoors hasn’t demonstrated much growth in its dividend payments over the years. The current payout has remained steady, but there haven’t been significant increases, which might disappoint investors looking for compounding returns.
Dividend safety is where things get even trickier. The company has been losing money, reporting a net loss of $45.78 million over the past twelve months. If it’s not bringing in enough profit to cover the dividend, it has to dip into cash reserves—or worse, borrow money—to maintain payments.
On a positive note, JOUT does have a decent cash cushion, with $101.62 million in cash and only $50.06 million in debt. This suggests it has some breathing room, but without a turnaround in profitability, it won’t be able to sustain dividend payments indefinitely.
Chart Analysis
The chart for Johnson Outdoors (JOUT) paints a picture of a stock that has been stuck in a prolonged downtrend. While there have been occasional rallies, the overall direction remains negative, with no clear sign of a major trend reversal yet. The stock is trading well below both its 50-day and 200-day moving averages, indicating continued weakness.
Moving Averages and Trend Direction
The 50-day moving average is trending downward and sitting significantly below the 200-day moving average, confirming a long-term bearish trend. The gap between these two moving averages suggests that selling pressure has been dominant, and there hasn’t been enough sustained buying interest to reverse momentum.
The stock attempted a breakout in mid-summer and again in early winter, but both rallies were short-lived, failing to push past key resistance levels. This signals that buyers haven’t had enough conviction to shift the overall direction of the stock.
Volume Activity
Volume spikes have occurred at various points, especially during sharp declines and temporary rebounds. There was a noticeable increase in volume during the mid-summer rally, but the stock failed to hold those gains, eventually rolling over.
More recently, volume has remained relatively stable, though there have been some higher green bars, suggesting some accumulation is taking place at lower levels. However, the lack of sustained volume surges makes it unclear whether this is a true bottoming pattern or just another pause before further downside.
Relative Strength Index (RSI)
The RSI has been hovering in the lower range, often sitting near oversold territory. While this indicates the stock may be undervalued in the short term, it doesn’t necessarily guarantee a reversal. A stock can stay oversold for extended periods, especially when the broader trend remains bearish.
The recent slight uptick in RSI suggests that selling pressure is easing somewhat, but it’s still far from signaling a strong momentum shift in favor of buyers.
Price Action and Recent Candlesticks
The latest five candlesticks show some attempts at stabilization, with small wicks on both ends indicating indecision among traders. Buyers have stepped in near the $25-$26 range, preventing further downside for now. However, the lack of strong bullish candles suggests that momentum is still weak.
If the stock can push above short-term resistance around $28-$29, it could indicate the beginning of a larger rebound. However, failure to hold recent lows could open the door to retesting the $25 area or lower.
Analyst Ratings
Johnson Outdoors Inc. (JOUT) has seen a range of analyst opinions recently, with both positive and cautious takes on its future prospects.
🟢 Upgrades
📈 Buy Rating from Sidoti & Co. – Analysts at Sidoti & Co. upgraded Johnson Outdoors from neutral to buy in response to its strong financial performance and expanding market reach. The company had demonstrated solid earnings growth and resilience in its outdoor recreation segments, which supported the case for a higher valuation at that time.
🔴 Downgrades
📉 Price Target Reduction – In a more recent update, analysts revised their price target downward by 16.67% to 56.10 per share. The revision was driven by concerns over revenue growth slowing, ongoing supply chain constraints, and changing consumer demand in key product categories. The new price targets ranged from 55.55 to 57.75 per share, reflecting tempered expectations for near-term performance.
📊 Consensus Price Target
💰 The latest one-year average price target for Johnson Outdoors is 51.00 per share. This suggests analysts see moderate upside potential but remain cautious about the challenges the company faces in maintaining profitability and revenue stability.
Investor sentiment around JOUT remains mixed, with some believing the stock is undervalued at current levels, while others are wary of ongoing economic pressures that could weigh on future earnings.
Earnings Report Summary
Johnson Outdoors Inc. recently released its latest earnings report, and while the numbers show some challenges, the company is holding steady in a tough market. Sales took a hit, dropping 22.4 percent compared to the same period last year, coming in at 128.1 million dollars for the quarter ending December 27, 2024. That decline led to an operating loss of 18.9 million dollars, which isn’t ideal, but management remains focused on navigating the current economic environment.
How Each Business Segment Performed
- Fishing segment – Sales dropped by 30 percent, with demand slowing down and competition heating up.
- Camping and watercraft recreation – Down 10 percent, likely due to shifting consumer interests and some unfavorable weather conditions.
- Diving segment – Saw a 15 percent decline, as travel restrictions continued to impact diving destinations.
Financial Position
Despite the tough quarter, Johnson Outdoors is still in a solid financial position. The company has 101.6 million dollars in cash and short-term investments, although that’s a bit lower than the previous quarter. One big plus—there’s no debt on the balance sheet, which gives the company some breathing room to adjust strategies without financial strain. They also kept capital expenditures in check at 4.1 million dollars, focusing mostly on product development and improving operations.
What Management Had to Say
David W. Johnson, the company’s CFO, acknowledged the difficulties but pointed out that they’re actively working on cost-cutting measures and better inventory management. He also highlighted the importance of their debt-free status, which puts them in a stronger position compared to some competitors. While the quarter wasn’t great, leadership seems confident in their ability to navigate the situation and stay committed to long-term value creation.
Dividend Announcement
Good news for income investors—Johnson Outdoors is sticking with its dividend. The board declared a quarterly cash dividend for shareholders as of January 9, 2025, with payment scheduled for January 23, 2025. Even in a challenging market, the company is keeping up with its shareholder payouts, which is a positive sign for those counting on income from their investments.
Looking Ahead
The company is focusing on cutting costs while still investing in areas that will strengthen the business. They’re not expecting an overnight turnaround, but their strong balance sheet and strategic approach should help them weather the current conditions. Johnson Outdoors is playing the long game, and while the short term might be rocky, they’re positioning themselves for a more stable future.
Financial Health and Stability
Looking at the company’s balance sheet, there are both positives and negatives to consider.
On the bright side:
✅ Strong cash reserves of $101.62 million
✅ Relatively low total debt of $50.06 million
✅ A current ratio of 4.23, meaning it has ample liquidity to cover short-term obligations
But these strengths are overshadowed by some concerning financial trends:
❌ Profit margins are in the red at -8.15%
❌ Return on equity is negative at -9.70%, meaning shareholders aren’t seeing returns on their investments
❌ Quarterly revenue is down 22.4% year-over-year, signaling slowing demand
While the company isn’t in immediate financial distress, negative earnings and declining revenue create uncertainty. A business can only operate at a loss for so long before difficult decisions—such as cutting dividends—become necessary.
Valuation and Stock Performance
JOUT’s stock is currently trading at $26.43, hovering near its 52-week low of $25.18. That’s a steep drop from its 52-week high of $46.38, reflecting weak investor confidence.
Valuation metrics suggest the stock is cheap:
📉 Price-to-Book Ratio: 0.64, indicating it’s trading below its book value
📉 Price-to-Sales Ratio: 0.50, suggesting a low valuation compared to revenue
📉 Trailing P/E: 77.38, largely due to earnings declines
The stock has struggled, falling nearly 40% from its highs over the past year. However, with a beta of 0.63, it tends to be less volatile than the broader market, which might appeal to conservative investors.
Risks and Considerations
There are several key risks investors should keep in mind when considering JOUT as a dividend stock.
🔴 High Dividend Cut Risk – With a payout ratio above 270%, the company is paying out far more than it earns. If earnings don’t recover, a dividend cut is likely.
🔴 Weak Revenue Growth – The 22.4% decline in quarterly revenue suggests the company is struggling with demand, which could impact future profits.
🔴 Profitability Issues – A net loss of $45.78 million is a significant concern, as dividends are typically paid from earnings, not cash reserves.
🔴 Small-Cap Volatility – As a small-cap stock with a market cap of $281 million, JOUT is more susceptible to economic downturns than larger companies.
With these challenges, JOUT isn’t the type of dividend stock investors can buy and forget about. Monitoring earnings reports, revenue trends, and cash flow will be critical.
Final Thoughts
Johnson Outdoors offers an attractive dividend yield, but it comes with considerable risk. The high payout ratio, declining earnings, and negative revenue growth make it a questionable long-term income investment. While the company has enough cash to keep paying dividends in the short term, it needs to turn its financials around to maintain payouts in the long run.
For dividend investors, this isn’t a stock to blindly chase for yield. Instead, it requires careful observation and a clear understanding of the risks involved. The next few earnings reports will be crucial in determining whether Johnson Outdoors can stabilize its business—or if a dividend cut is on the horizon.
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