Yahoo Finance Wabash National (NYSE:WNC) Has Announced A Dividend Of $0.08
Wabash National Corporation's (NYSE:WNC) investors are due to receive a payment of $0.08 per share on 25th of July. This payment means that the dividend yield will be 1.4%, which is around the industry average.
Check out our latest analysis for Wabash National
Wabash National's Payment Has Solid Earnings Coverage
We aren't too impressed by dividend yields unless they can be sustained over time. However, prior to this announcement, Wabash National's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.
Looking forward, earnings per share is forecast to fall by 27.9% over the next year. Assuming the dividend continues along recent trends, we believe the payout ratio could be 11%, which we are pretty comfortable with and we think is feasible on an earnings basis.
Wabash National Doesn't Have A Long Payment History
It is great to see that Wabash National has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2017, the dividend has gone from $0.24 total annually to $0.32. This implies that the company grew its distributions at a yearly rate of about 4.2% over that duration. We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Wabash National has grown earnings per share at 32% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.
We Really Like Wabash National's Dividend
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All of these factors considered, we think this has solid potential as a dividend stock.
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. For example, we've identified 2 warning signs for Wabash National (1 is potentially serious!) that you should be aware of before investing. Is Wabash National not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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