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Weyco Group, Inc. (NASDAQ:WEYS) will increase its dividend from last year's comparable payment on the 30th of June to $0.27. This will take the annual payment to 3.3% of the stock price, which is above what most companies in the industry pay.
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Weyco Group's Future Dividend Projections Appear Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, Weyco Group's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
Earnings per share could rise by 10.8% over the next year if things go the same way as they have for the last few years. If recent patterns in the dividend continue, the payout ratio in 12 months could be 93% which is a bit high but can definitely be sustainable.
Check out our latest analysis for Weyco Group
Weyco Group Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $0.76 in 2015 to the most recent total annual payment of $1.08. This implies that the company grew its distributions at a yearly rate of about 3.6% over that duration. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Weyco Group has been growing its earnings per share at 11% a year over the past five years. Weyco Group definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Weyco Group Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Weyco Group is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Now, if you want to look closer, it would be worth checking out our free research on Weyco Group management tenure, salary, and performance. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.