Yahoo Finance Albany International Corp. (NYSE:AIN) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
Albany International Corp. (NYSE:AIN) is about to trade ex-dividend in the next three days. You will need to purchase shares before the 4th of September to receive the dividend, which will be paid on the 7th of October.
Albany International's next dividend payment will be US$0.19 per share, on the back of last year when the company paid a total of US$0.76 to shareholders. Calculating the last year's worth of payments shows that Albany International has a trailing yield of 1.4% on the current share price of $52.85. If you buy this business for its dividend, you should have an idea of whether Albany International's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
See our latest analysis for Albany International
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Albany International has a low and conservative payout ratio of just 22% of its income after tax. 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. The good news is it paid out just 22% of its free cash flow in the last year.
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?
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. It's encouraging to see Albany International has grown its earnings rapidly, up 21% a year for the past five years. With earnings per share growing rapidly and the company sensibly reinvesting almost all of its profits within the business, Albany International looks like a promising growth company.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Albany International has increased its dividend at approximately 4.7% a year on average. Earnings per share have been growing much quicker than dividends, potentially because Albany International is keeping back more of its profits to grow the business.
The Bottom Line
Is Albany International an attractive dividend stock, or better left on the shelf? We love that Albany International 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. There's a lot to like about Albany International, and we would prioritise taking a closer look at it.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. To help with this, we've discovered 2 warning signs for Albany International that you should be aware of before investing in their shares.
If you're in the market for dividend stocks, we recommend checking our list of top 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.
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