Four Days Left To Buy C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) Before The Ex-Dividend Date
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) is about to trade ex-dividend in the next four days. You will need to purchase shares before the 4th of March to receive the dividend, which will be paid on the 1st of April.
C.H. Robinson Worldwide's next dividend payment will be US$0.51 per share. Last year, in total, the company distributed US$2.04 to shareholders. Calculating the last year's worth of payments shows that C.H. Robinson Worldwide has a trailing yield of 2.2% on the current share price of $90.85. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether C.H. Robinson Worldwide has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for C.H. Robinson Worldwide
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. C.H. Robinson Worldwide paid out more than half (55%) of its earnings last year, which is a regular payout ratio for most companies. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It distributed 47% of its free cash flow as dividends, a comfortable payout level for most companies.
It's positive to see that C.H. Robinson Worldwide's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's not encouraging to see that C.H. Robinson Worldwide's earnings are effectively flat over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share. Earnings growth has been slim and the company is paying out more than half of its earnings. While there is some room to both increase the payout ratio and reinvest in the business, generally the higher a payout ratio goes, the lower a company's prospects for future growth.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, C.H. Robinson Worldwide has lifted its dividend by approximately 7.4% a year on average.
The Bottom Line
Is C.H. Robinson Worldwide an attractive dividend stock, or better left on the shelf? Earnings per share have been flat and C.H. Robinson Worldwide's dividend payouts are within reasonable limits; without a sharp decline in earnings we feel that the dividend is likely somewhat sustainable. Overall, it's hard to get excited about C.H. Robinson Worldwide from a dividend perspective.
While it's tempting to invest in C.H. Robinson Worldwide for the dividends alone, you should always be mindful of the risks involved. To help with this, we've discovered 2 warning signs for C.H. Robinson Worldwide 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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