Global Ship Lease (NYSE:GSL) Has Announced A Dividend Of $0.375
The board of Global Ship Lease, Inc. (NYSE:GSL) has announced that it will pay a dividend of $0.375 per share on the 4th of September. The dividend yield is 7.3% based on this payment, which is a little bit low compared to the other companies in the industry.
See our latest analysis for Global Ship Lease
Global Ship Lease's Earnings Easily Cover The Distributions
While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible. However, Global Ship Lease's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
EPS is set to fall by 8.3% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio could be 19%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.
Global Ship Lease's Dividend Has Lacked Consistency
It's comforting to see that Global Ship Lease has been paying a dividend for a number of years now, however it has been cut at least once in that time. If the company cuts once, it definitely isn't argument against the possibility of it cutting in the future. The dividend has gone from an annual total of $3.20 in 2015 to the most recent total annual payment of $1.50. The dividend has shrunk at around 9.0% a year during that period. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.
The Dividend Looks Likely To Grow
Given that the track record hasn't been stellar, we really want to see earnings per share growing over time. Global Ship Lease has impressed us by growing EPS at 76% per year over the past five years. 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.
Global Ship Lease Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Global Ship Lease might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Case in point: We've spotted 3 warning signs for Global Ship Lease (of which 1 is concerning!) you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
