Advertisement
U.S. markets closed
  • S&P 500

    5,123.41
    -75.65 (-1.46%)
     
  • Dow 30

    37,983.24
    -475.86 (-1.24%)
     
  • Nasdaq

    16,175.09
    -267.11 (-1.62%)
     
  • Russell 2000

    2,003.17
    -39.43 (-1.93%)
     
  • Crude Oil

    85.45
    +0.43 (+0.51%)
     
  • Gold

    2,360.20
    -12.50 (-0.53%)
     
  • Silver

    27.97
    -0.28 (-0.99%)
     
  • EUR/USD

    1.0646
    -0.0085 (-0.79%)
     
  • 10-Yr Bond

    4.4990
    -0.0770 (-1.68%)
     
  • GBP/USD

    1.2451
    -0.0104 (-0.83%)
     
  • USD/JPY

    153.2400
    +0.0370 (+0.02%)
     
  • Bitcoin USD

    64,300.06
    -2,447.28 (-3.67%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,995.58
    +71.78 (+0.91%)
     
  • Nikkei 225

    39,523.55
    +80.95 (+0.21%)
     

Albemarle (NYSE:ALB) Is Due To Pay A Dividend Of $0.40

Albemarle Corporation (NYSE:ALB) will pay a dividend of $0.40 on the 1st of April. This means the annual payment will be 1.3% of the current stock price, which is lower than the industry average.

Check out our latest analysis for Albemarle

Albemarle's Earnings Easily Cover The Distributions

If it is predictable over a long period, even low dividend yields can be attractive. Albemarle is quite easily earning enough to cover the dividend, however it is being let down by weak cash flows. With the company not bringing in any cash, paying out to shareholders is bound to become difficult at some point.

The next year is set to see EPS grow by 67.4%. If the dividend continues on this path, the payout ratio could be 7.5% by next year, which we think can be pretty sustainable going forward.

historic-dividend
historic-dividend

Albemarle Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.96, compared to the most recent full-year payment of $1.60. This works out to be a compound annual growth rate (CAGR) of approximately 5.2% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Albemarle has impressed us by growing EPS at 16% per year over the past five years. Albemarle definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Our Thoughts On Albemarle's Dividend

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Albemarle's payments, as there could be some issues with sustaining them into the future. While the low payout ratio is a redeeming feature, this is offset by the minimal cash to cover the payments. We would probably look elsewhere for an income investment.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Case in point: We've spotted 2 warning signs for Albemarle (of which 1 is potentially serious!) you should know about. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Advertisement