Yahoo Finance Waste Management Inc's Dividend Analysis
Exploring the Sustainability and Growth of Waste Management Inc's Dividends
Waste Management Inc (NYSE:WM) recently announced a dividend of $0.75 per share, payable on 2024-06-21, with the ex-dividend date set for 2024-06-07. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Waste Management Inc's dividend performance and assess its sustainability.
What Does Waste Management Inc Do?
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Waste Management Inc is the largest integrated provider of traditional solid waste services in the United States, operating 263 active landfills and about 332 transfer stations. The company serves residential, commercial, and industrial end markets and is also a leading recycler in North America.
A Glimpse at Waste Management Inc's Dividend History
Waste Management Inc has maintained a consistent dividend payment record since 1998. Dividends are currently distributed on a quarterly basis. Waste Management Inc has increased its dividend each year since 1999, earning it the status of a dividend aristocrata title reserved for companies that have increased their dividends annually for at least the past 25 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Waste Management Inc's Dividend Yield and Growth
As of today, Waste Management Inc currently has a 12-month trailing dividend yield of 1.40% and a 12-month forward dividend yield of 1.47%. This suggests an expectation of increased dividend payments over the next 12 months. However, Waste Management Inc's dividend yield of 1.40% is near a 10-year low and underperforms 70.49% of global competitors in the Waste Management industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Over the past three years, Waste Management Inc's annual dividend growth rate was 8.70%. Extended to a five-year horizon, this rate decreased to 8.40% per year. And over the past decade, Waste Management Inc's annual dividends per share growth rate stands at 7.00%.
Based on Waste Management Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Waste Management Inc stock as of today is approximately 2.10%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of 2024-03-31, Waste Management Inc's dividend payout ratio is 0.43, suggesting that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns.
Waste Management Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Waste Management Inc's profitability 9 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Waste Management Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Waste Management Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Waste Management Inc's revenue has increased by approximately 11.90% per year on average, a rate that outperforms approximately 61.86% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Waste Management Inc's earnings increased by approximately 18.30% per year on average, a rate that outperforms approximately 70.33% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 8.30%, which outperforms approximately 48.72% of global competitors.
Concluding Thoughts on Waste Management Inc's Dividend Viability
Considering Waste Management Inc's consistent dividend payments, growth in dividend rates, and robust financial health indicated by a sustainable payout ratio and strong profitability metrics, the company appears well-positioned to continue its dividend aristocrat status. Its effective management of earnings and strategic growth initiatives further reinforce this outlook. For those interested in dividend investing, Waste Management Inc represents a potentially stable and growing income source.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
