NYSE:WHR) is about to trade ex-dividend in the next four days. You can purchase shares before the 27th of August in order to receive the dividend, which the company will pay on the 15th of September.” data-reactid=”28″ type=”text”>Whirlpool Corporation (NYSE:WHR) is about to trade ex-dividend in the next four days. You can purchase shares before the 27th of August in order to receive the dividend, which the company will pay on the 15th of September.
Whirlpool’s next dividend payment will be US$1.20 per share, and in the last 12 months, the company paid a total of US$4.80 per share. Looking at the last 12 months of distributions, Whirlpool has a trailing yield of approximately 2.7% on its current stock price of $180.78. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Whirlpool has been able to grow its dividends, or if the dividend might be cut.
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. Fortunately Whirlpool’s payout ratio is modest, at just 36% of profit. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It distributed 38% of its free cash flow as dividends, a comfortable payout level for most companies.
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.
here to see the company’s payout ratio, plus analyst estimates of its future dividends.” data-reactid=”37″ type=”text”>Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we’re encouraged by the steady growth at Whirlpool, with earnings per share up 9.7% on average over the last five years. Management have been reinvested more than half of the company’s earnings within the business, and the company has been able to grow earnings with this retained capital. Organisations that reinvest heavily in themselves typically get stronger over time, which can bring attractive benefits such as stronger earnings and dividends.
The main way most investors will assess a company’s dividend prospects is by checking the historical rate of dividend growth. Whirlpool has delivered 11% 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.
To Sum It Up
Should investors buy Whirlpool for the upcoming dividend? Earnings per share growth has been growing somewhat, and Whirlpool is paying out less than half its earnings and cash flow as dividends. This is interesting for a few reasons, as it suggests management may be reinvesting heavily in the business, but it also provides room to increase the dividend in time. It might be nice to see earnings growing faster, but Whirlpool is being conservative with its dividend payouts and could still perform reasonably over the long run. Whirlpool looks solid on this analysis overall, and we’d definitely consider investigating it more closely.
3 warning signs for Whirlpool (1 makes us a bit uncomfortable!) that deserve your attention before investing in the shares.” data-reactid=”59″ type=”text”>While it’s tempting to invest in Whirlpool for the dividends alone, you should always be mindful of the risks involved. For example, we’ve found 3 warning signs for Whirlpool (1 makes us a bit uncomfortable!) that deserve your attention before investing in the shares.
a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.” data-reactid=”60″ type=”text”>We wouldn’t recommend just buying the first dividend stock you see, though. Here’s a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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.