New Zealand markets closed
  • NZX 50

    11,684.81
    -129.53 (-1.10%)
     
  • NZD/USD

    0.6176
    -0.0082 (-1.32%)
     
  • NZD/EUR

    0.6148
    -0.0050 (-0.81%)
     
  • ALL ORDS

    7,358.70
    +1.00 (+0.01%)
     
  • ASX 200

    7,114.50
    +1.70 (+0.02%)
     
  • OIL

    90.02
    -0.48 (-0.53%)
     
  • GOLD

    1,761.10
    -10.10 (-0.57%)
     
  • NASDAQ

    13,242.90
    -263.09 (-1.95%)
     
  • FTSE

    7,550.37
    +8.52 (+0.11%)
     
  • Dow Jones

    33,706.74
    -292.30 (-0.86%)
     
  • DAX

    13,544.52
    -152.89 (-1.12%)
     
  • Hang Seng

    19,773.03
    +9.12 (+0.05%)
     
  • NIKKEI 225

    28,930.33
    -11.77 (-0.04%)
     
  • NZD/JPY

    84.5130
    -0.4680 (-0.55%)
     

Worthington Industries (NYSE:WOR) Is Paying Out A Larger Dividend Than Last Year

·2-min read

The board of Worthington Industries, Inc. (NYSE:WOR) has announced that it will be increasing its dividend on the 29th of September to US$0.31. Although the dividend is now higher, the yield is only 2.5%, which is below the industry average.

Check out our latest analysis for Worthington Industries

Worthington Industries' Earnings Easily Cover the Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. Based on the last payment, Worthington Industries was earning enough to cover the dividend, but free cash flows weren't positive. With the company not bringing in any cash, paying out to shareholders is bound to become difficult at some point.

Over the next year, EPS is forecast to fall by 23.8%. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 20%, which is comfortable for the company to continue in the future.

historic-dividend
historic-dividend

Worthington Industries Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from US$0.48 in 2012 to the most recent annual payment of US$1.24. This means that it has been growing its distributions at 10.0% per annum over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Worthington Industries has grown earnings per share at 19% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

In Summary

Overall, we always like to see the dividend being raised, but we don't think Worthington Industries will make a great income stock. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. Overall, we don't think this company has the makings of a good income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 6 warning signs for Worthington Industries you should be aware of, and 3 of them are a bit concerning. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting