How will the $0.405 quarterly dividend affect Ross Stores' valuation and price-to-earnings ratio?

Impact on valuation and P/E

The $0.405 per‑share quarterly dividend will be paid out of the firm’s cash flow, so the market‑cap valuation will be reduced by roughly the same amount per share once the ex‑dividend date (Sept 9, 2025) passes. In practice the stock price typically drops by the dividend amount on the ex‑date, reflecting the transfer of value from the company to shareholders. For a share that is trading around $115 (the recent 52‑week range), a $0.405 payout represents a ≈0.35 % price adjustment – a modest but measurable dip in the equity value.

Because earnings are unchanged, the price‑to‑earnings (P/E) ratio will move in the opposite direction of the price. A $0.405 decline in the share price while Q4 earnings remain the same will cause the P/E to rise slightly (e.g., from 18.2× to about 18.3× if earnings stay at $6.30 per share). The effect is small, but it nudges the valuation upward on a relative basis, reinforcing the perception that Ross Stores is a modest‑growth, dividend‑paying retailer rather than a high‑multiple growth stock.

Trading implications

• Dividend‑capture opportunity: Traders who own the stock before the record date will receive the dividend, but the price will already be “priced‑in” by the ex‑date drop. Expect a short‑term, low‑volatility pull‑back of ≈$0.40‑$0.45.
  
• Technical bias: The recent chart shows the stock near a mid‑term support zone around $112‑$115. A dividend‑induced dip could test that support; a bounce would confirm the level, while a break below could open a short‑side move toward $108.
  
• Fundamental bias: The dividend adds a modest yield (~0.35 %). For dividend‑focused investors, the yield improves the total‑return profile without materially inflating the P/E, making the stock attractive at current valuation levels.
  

Actionable take‑away: If you are a long‑term holder, stay through the ex‑date and keep the position; the dividend adds cash with minimal impact on valuation. If you are a short‑term trader, consider a buy‑the‑dip near the ex‑dividend price drop, targeting a quick rebound to the $112‑$115 support zone, while keeping a stop just below $108 in case the dividend‑related sell‑off turns into a broader downtrend.