Wendy’s (NASDAQ: WEN) stock has been rallying of late, prompting some to wonder if another meme-fueled rally could be underway.
The fast-food giant hasn’t been taken seriously in recent years as a top investment option; in five years, its valuation has crashed by a whopping 65%
Amid its decline this year, its dividend yield has shot up to a mouthwatering 7.1%, which is well above the S&P 500 average of only 1.1%. If the payout is safe, that could provide investors with some incentive to buy and hold. But is the dividend really sustainable, and if it is, should you buy Wendy’s stock?
What do the company’s recent financials say? Wendy’s has a payout ratio of around 73%, but it’s always a good idea to look at the most recent results to get a good indication of its financial strength. Earnings, after all, can get distorted due to one-time gains or losses.