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Hyster-Yale Materials Handling (NYSE:HY) Is Paying Out A Dividend Of $0.3225

The board of Hyster-Yale Materials Handling, Inc. (NYSE:HY) has announced that it will pay a dividend on the 15th of December, with investors receiving $0.3225 per share. This makes the dividend yield 4.1%, which will augment investor returns quite nicely.

See our latest analysis for Hyster-Yale Materials Handling

Hyster-Yale Materials Handling Is Paying Out More Than It Is Earning

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Even in the absence of profits, Hyster-Yale Materials Handling is paying a dividend. It is also not generating any free cash flow, we definitely have concerns when it comes to the sustainability of the dividend.

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The next 12 months is set to see EPS grow by 108.1%. If the dividend continues on its recent course, the payout ratio in 12 months could be 149%, which is a bit high and could start applying pressure to the balance sheet.

historic-dividend
historic-dividend

Hyster-Yale Materials Handling Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $1.00 in 2012 to the most recent total annual payment of $1.29. This means that it has been growing its distributions at 2.6% per annum over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

Dividend Growth Potential Is Shaky

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, things aren't all that rosy. Hyster-Yale Materials Handling's EPS has fallen by approximately 68% per year during the past five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future. Over the next year, however, earnings are actually predicted to rise, but we would still be cautious until a track record of earnings growth can be built.

Hyster-Yale Materials Handling's Dividend Doesn't Look Sustainable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Hyster-Yale Materials Handling's payments, as there could be some issues with sustaining them into the future. Although they have been consistent in the past, we think the payments are a little high to be sustained. This company is not in the top tier of income providing stocks.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 2 warning signs for Hyster-Yale Materials Handling that investors need to be conscious of moving forward. Is Hyster-Yale Materials Handling not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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