Yahoo Finance There's A Lot To Like About Expeditors International of Washington's (NASDAQ:EXPD) Upcoming US$0.67 Dividend
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Expeditors International of Washington, Inc. (NASDAQ:EXPD) is about to go ex-dividend in just four days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase Expeditors International of Washington's shares before the 30th of November in order to receive the dividend, which the company will pay on the 15th of December.
The company's upcoming dividend is US$0.67 a share, following on from the last 12 months, when the company distributed a total of US$1.34 per share to shareholders. Based on the last year's worth of payments, Expeditors International of Washington stock has a trailing yield of around 1.2% on the current share price of $113.99. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Expeditors International of Washington has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Expeditors International of Washington
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Expeditors International of Washington paid out just 13% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It paid out 11% of its free cash flow as dividends last year, which is conservatively low.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Expeditors International of Washington has grown its earnings rapidly, up 33% a year for the past five years. Expeditors International of Washington earnings per share have been sprinting ahead like the Road Runner at a track and field day; scarcely stopping even for a cheeky "beep-beep". We also like that it is reinvesting most of its profits in its business.'
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Expeditors International of Washington has delivered 9.1% dividend growth per year on average over the past 10 years. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
The Bottom Line
Is Expeditors International of Washington an attractive dividend stock, or better left on the shelf? We love that Expeditors International of Washington is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. These characteristics suggest the company is reinvesting in growing its business, while the conservative payout ratio also implies a reduced risk of the dividend being cut in the future. Expeditors International of Washington looks solid on this analysis overall, and we'd definitely consider investigating it more closely.
On that note, you'll want to research what risks Expeditors International of Washington is facing. We've identified 2 warning signs with Expeditors International of Washington (at least 1 which is potentially serious), and understanding these should be part of your investment process.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are 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.
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