Brady (NYSE:BRC) Is Due To Pay A Dividend Of US$0.23

The board of Brady Corporation (NYSE:BRC) has announced that it will pay a dividend of US$0.23 per share on the 29th of July. This makes the dividend yield 1.8%, which will augment investor returns quite nicely.

Check out our latest analysis for Brady

Brady's Earnings Easily Cover the Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, Brady's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 23.5%. If the dividend continues on this path, the payout ratio could be 27% by next year, which we think can be pretty sustainable going forward.

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Brady Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The first annual payment during the last 10 years was US$0.74 in 2012, and the most recent fiscal year payment was US$0.90. This implies that the company grew its distributions at a yearly rate of about 2.0% over that duration. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

Brady Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Brady has impressed us by growing EPS at 7.8% per year over the past five years. Brady definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Brady's Dividend

Overall, we like to see the dividend staying consistent, and we think Brady might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 4 analysts we track are forecasting for Brady for free with public analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.