Winnebago Industries (NYSE:WGO) raises its dividend to $0.27
Winnebago Industries, Inc. (NYSE:WGO) the dividend will increase from the payout for the same period last year to $0.27 on September 28. The payout will bring the dividend yield to 1.8%, which is in line with the industry average.
Winnebago Industries dividend is well covered by earnings
We like a dividend to be consistent over the long term, so it’s important to check if it’s sustainable. Prior to making this announcement, Winnebago Industries was easily earning enough to cover the dividend. This means most of his income is kept to grow the business.
Over the next year, EPS is expected to fall by 28.8%. If the dividend continues on the path it has been on recently, we estimate the payout ratio could be 9.8%, which is comfortable for the company to continue going forward.
Winnebago Industries continues to build its balance sheet
The Winnebago Industries dividend has been fairly stable for a little while now, but we will remain cautious until it is demonstrated for a few more years. The dividend has gone from an annual total of $0.36 in 2014 to the most recent total annual payment of $1.08. This means that it increased its distributions by 15% per year during this period. Winnebago Industries has increased its dividend quite quickly, which is exciting. However, the short payout history makes us wonder if this performance will persist through a full market cycle.
The dividend should increase
Investors might be attracted to the stock because of the quality of its payment history. It is encouraging to see that Winnebago Industries has grown its earnings per share by 44% per year over the past five years. Earnings have grown rapidly, and with a low payout ratio, we believe the company could prove to be an excellent dividend-paying stock.
We really like the Winnebago Industries dividend
Overall, a dividend increase is always good, and we believe Winnebago Industries is a high-income stock thanks to its track record and growing earnings. Profits easily cover company distributions, and the company generates plenty of cash. Note that earnings are expected to fall over the next 12 months, which won’t be a problem if it doesn’t become a trend, but could cause some turbulence over the next year. Considering all of this, it looks like a good dividend opportunity.
Market movements testify to the valuation of a consistent dividend policy over a more unpredictable one. Meanwhile, despite the importance of dividend payouts, these are not the only factors our readers should be aware of when evaluating a company. Example: we have identified 2 warning signs for Winnebago Industries (1 of which is a little worrying!) that you should know about. Is Winnebago Industries not quite the opportunity you were looking for? Why not check out our selection of the best dividend stocks.
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