Yahoo Finance Expeditors International of Washington's (NASDAQ:EXPD) Shareholders Will Receive A Bigger Dividend Than Last Year
Expeditors International of Washington, Inc. (NASDAQ:EXPD) has announced that it will be increasing its dividend from last year's comparable payment on the 15th of June to $0.69. Despite this raise, the dividend yield of 1.2% is only a modest boost to shareholder returns.
View our latest analysis for Expeditors International of Washington
Expeditors International of Washington's Dividend Is Well Covered By Earnings
If it is predictable over a long period, even low dividend yields can be attractive. However, Expeditors International of Washington's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.
EPS is set to fall by 25.7% over the next 12 months. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 24%, which is comfortable for the company to continue in the future.
Expeditors International of Washington Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2013, the annual payment back then was $0.56, compared to the most recent full-year payment of $1.38. This implies that the company grew its distributions at a yearly rate of about 9.4% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. Expeditors International of Washington has seen EPS rising for the last five years, at 22% per annum. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
Expeditors International of Washington Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Expeditors International of Washington is a strong income stock thanks to its track record and growing earnings. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Expeditors International of Washington that investors should know about before committing capital to this stock. Is Expeditors International of Washington not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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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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