Yahoo Finance Hyster-Yale Materials Handling (NYSE:HY) Has Announced A Dividend Of $0.3225
Hyster-Yale Materials Handling, Inc. (NYSE:HY) has announced that it will pay a dividend of $0.3225 per share on the 15th of September. This means the annual payment is 3.9% of the current stock price, which is above the average for the industry.
View our latest analysis for Hyster-Yale Materials Handling
Hyster-Yale Materials Handling's Earnings Easily Cover The Distributions
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. 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.
The next year is set to see EPS grow by 138.4%. If the dividend continues on this path, the payout ratio could be 26% by next year, which we think can be pretty sustainable going forward.
Hyster-Yale Materials Handling Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $1.00 in 2012 to the most recent total annual payment of $1.29. This works out to be a compound annual growth rate (CAGR) of approximately 2.6% a year over that time. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.
The Dividend Has Limited Growth Potential
Investors could be attracted to the stock based on the quality of its payment history. However, things aren't all that rosy. Hyster-Yale Materials Handling's EPS has fallen by approximately 65% per year during the past five years. A sharp decline in earnings per share is not great from from a dividend perspective. Even conservative payout ratios can come under pressure if earnings fall far enough. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this becomes a long term trend.
Hyster-Yale Materials Handling's Dividend Doesn't Look Sustainable
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. In the past the payments have been stable, but we think the company is paying out too much for this to continue for the long term. Overall, we don't think this company has the makings of a good income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. 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. 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.
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