Yahoo Finance Miller Industries' (NYSE:MLR) Dividend Will Be $0.18
Miller Industries, Inc. (NYSE:MLR) will pay a dividend of $0.18 on the 12th of September. This makes the dividend yield 3.2%, which will augment investor returns quite nicely.
Check out our latest analysis for Miller Industries
Miller Industries' Dividend Is Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Before making this announcement, Miller Industries was earning enough to cover the dividend, but it wasn't generating any free cash flows. No cash flows could definitely make returning cash to shareholders difficult, or at least mean the balance sheet will come under pressure.
EPS is set to fall by 8.5% over the next 12 months if recent trends continue. If the dividend continues along recent trends, we estimate the payout ratio could be 74%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.
Miller Industries Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $0.48 in 2012 to the most recent total annual payment of $0.72. This works out to be a compound annual growth rate (CAGR) of approximately 4.1% a year over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.
Dividend Growth Is Doubtful
Investors could be attracted to the stock based on the quality of its payment history. However, things aren't all that rosy. It's not great to see that Miller Industries' earnings per share has fallen at approximately 8.5% per year over the past five years. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed.
In Summary
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Miller Industries' payments, as there could be some issues with sustaining them into the future. While Miller Industries is earning enough to cover the payments, the cash flows are lacking. We would probably look elsewhere for an income investment.
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. To that end, Miller Industries has 4 warning signs (and 2 which can't be ignored) we think you should know about. Is Miller Industries 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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