Is Avon Products' Dividend Finally Safe?

Personal products firm Avon Products (NYSE: AVP) has had a tough go of it in recent times. In the space of five years, the stock has fallen from $30 to less than $9, where it trades as I write this. But not only has this been hard on the stock price, the company's struggles have taken a huge toll on the dividend as well. A once-robust payout has been reduced to a mere shadow of its former self and that has no doubt added to the pain shareholders have endured of late. In light of that, I'll use this article to take a look at AVP's financials to see if more dividend cuts are likely or if perhaps the current level is one that can be sustained.To do this, I'll be using data I've gathered from Morningstar.We'll begin with a quick look at the company's per share payout for the past ten years.Avon was quite the dividend growth stock in the middle and latter parts of the 2000s but since that time, the train ran far off the track. As the payout approached a dollar, it was suddenly slashed on two separate occasions and decimated to its current level. This is what happens when a company overextends and hits a rough patch in its business simultaneously, it gets ugly pretty quickly.This chart will give us an idea of the magnitude of the raises and cuts in the time frame above.AVP was producing nice mid-single digit increases in the years before the cuts began; no small feat for a dividend stock. But once things went south, they went south quickly and 2012's 19% cut... Read more

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